Governance aligned with compliance impacts reputation

Companies value themselves before stakeholders, ensuring stable and lasting relationships

By Godofredo de Souza Dantas Neto

Business environment also improves with good practices – Image: Shutterstock

The appreciation of governance aligned with compliance is recent in Brazil. The publication of Law No. 12,846/2013, the Anti-Corruption Law, can be taken as an initial development milestone. Although recent, it can be seen that it is promising, both from the point of view of contributing to improving the ethical quality of the business environment, and gaining reputational value for companies.

It is necessary to understand that gaining reputational value is strategically important because, at the same time as it favors the opening of new businesses and the attraction of investments, it generates monetary value for the brand.

“Mechanisms and programs that are not effective, which constitute only marketing, are not sufficient to attract reputational gains and, when tested, tend to generate the opposite effect.”

Companies that have a good governance structure, including compliance mechanisms in this concept – such as ethical adequacy that involves integrity, compliance with legislation and transparency – benefit from the resulting gains. Likewise, those that do not pay attention to this, lose space significantly, especially when exposed to facts resulting from legal violations, lack of ethical commitment or discovery of undesirable secrets.

Intelligent companies deal with the dynamics of governance and compliance standards naturally and receive the benefits of institutional quality, even because they clearly realize that the damage resulting from ethical deviations, non-compliance and lack of transparency are much greater than the possible benefits that the opposite behavior can generate.

These companies, adhering to good governance and compliance, value themselves to stakeholders, ensuring stable and lasting relationships, whether with suppliers or consumers, and are more attractive for investment. Therefore, it can be said that adherence to the governance and compliance environment is a great investment.

It is important to note that the effectiveness and procedural efficiency of governance and compliance are essential to confer credibility and reputational strength. Mechanisms and programs that are not effective and efficient, which constitute only marketing, are not sufficient to attract reputational gains and, when tested, tend to generate the opposite effect, by making inefficiency clear.

The use of governance aligned with compliance is capable of contributing decisively to maximizing a company's performance, notably through its reputational enhancement.

Godofredo de Souza Dantas Neto is a constitutional lawyer and president of the Brazilian Institute of Business Law and Ethics (IBDEE)

The signed articles reflect the opinion of the authors


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