Compliance managment is the process of ensuring that an organization is meeting its obligations under legal, regulatory and company policy requirements. Compliance may be required for policy, procedural, audit, security protocols, documentation and technical reasons.

It is important because failing to meet legal and regulatory requirements of state and federal bodies may result in financial penalties and, in some cases, jail terms if infractions lead to endangering the safety of the public.

Compliance can be required at all levels of an organization including the Human Resources department. Organizations must ensure that they follow a fair and equitable employment policy, for example. This means that they cannot indulge in discriminatory hiring practices, terminate employees without good cause, have varying pay levels based on a person’s sex or ethnicity and so on. Because of the complexity of compliance, organizations often have a department dedicated to this function.