Regulatory compliance refers to adhering to and meeting all legal, regulatory or standard requirements that are set by government agencies, industry associations or other authoritative bodies. This includes following rules, guidelines, policies and procedures related to safety, security, privacy, environmental protection, labor practices, financial reporting, taxation and other areas of operation.
The purpose of regulatory compliance is to ensure that organizations operate in a responsible, legal and ethical manner while minimizing risks and maintaining public trust. It involves implementing effective systems, processes and controls to monitor, report and manage compliance with applicable laws and standards. Failure to meet regulatory requirements can result in penalties, fines or loss of license, which is why it's important for organizations to prioritize regulatory compliance as part of their overall risk management strategy.