Global responsibility and risks of compliance failure in emerging markets
Contributor(s)Edited by Boubaker S., Buchanan B.G. and Nguyen D.K.
risk of compliance failure
integrated risk management
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AbstractPurpose: The aim of this chapter is to investigate the relationship between ethics, risks of compliance failure and strategic value of global responsibility for BRICS companies. Methodology/approach: The first part of the chapter adopts a theoretical approach: it introduces and analyses the key role of compliance risk management for sustainable and successful development of companies. The second part of the chapter uses an empirical approach, based on the case study method. The chapter focuses on the BRICS. Findings: The chapter demonstrates that mere formal compliance with laws, recommendations and internal codes is not sufficient for companies that want to be responsible and attract stakeholders’ consent and resources. A shared background of ethical principles is required for a proper understanding of the rules, in order to prevent the risk of compliance failure and limit the global risk exposure of a company. Research limitations: Due to the business perspective adopted in the research, this chapter leaves out the sociological aspects regarding how to create, spread and strengthen the culture of compliance within a company. Practical implications: The chapter encourages companies to connect ethical principles and compliance with the rules. Indeed, a lack of ethics in business operations, obscured by formal compliance, often results in indirect negative impacts on stakeholder relationships, so it is only a futile attempt to act responsibly. Originality/value: The originality of the chapter consists in suggesting the adoption of a responsibility-oriented approach for compliance risk management.