In order to be able to take an opportunity-focused approach in business it is of utmost importance to be risk informed i.e., to lay the foundation for risk management, as well as to be compliant in the broadest possible sense. Risk management and compliance are two sides of the same coin – risk management helps protect an organization from risks that could lead to non-compliance (a risk itself), while compliance with existent rules helps protect an organization from numerous unique risks.
Both risk management and compliance help an organization maintain its stability and integrity on multiple levels, and an organization can’t have a valid risk management program without compliance and vice versa.

Non-compliance can result in huge penalties, as well as reputational damage, and it requires more of a “box checking” approach to ensure your organization is abiding by prescribed rules and regulations. Whenever I provide trainings on compliance, considering their complexity and extensiveness, I do spend quite a lot of time on a slide with numerically depicted fines to which companies were subjected in cases of non-compliance, for example cartel conduct. And even if one would forget everything else from that training, what does tend to remain branded in one’s memory are those fines, the amounts of which were significant in a way that they could make or break a company. That’s why the approach to compliance is tactical. Risk management should depend more heavily on analysis in order to avoid risks or determine risks worth taking, the approach being strategic.

The predictive nature of risk management makes it less reactive as it should be able to forecast the impact risks will have on your organization and instigate new and innovative processes, while the prescriptive nature of compliance makes it more tactical, whereby an organization must abide by rules and regulations already in place to minimize risks or take advantage of their upsides.
Compliance is a manner of corporate life – however, complying with governance rules and regulations rarely translates into value-generating business propositions without the far-reaching approach of risk management. While compliance usually stops with verification that a rule has been followed to avoid risks, the best risk management can transform the necessary negatives associated with compliance into a winning value proposition.

The right risk manager can monitor all known governance (regulations, contracts, internal policies), make the connection between governance and the potentially impacted processes, places and people, facilitate compliance attestation and interface with other internal or external stakeholders for relevant updates. After analyzing such data and connecting it with other internal and external information, one can easily answer critical business questions, uncovering both threats and opportunities for your organization, and allowing you to focus on areas where your attention is most needed.
Risk management and compliance are different, but understanding their similarities and how to align the two allows you to benefit from compliance and risk management being in sync.