Corporate Compliance Laws and Regulations You Should Know

Companies use corporate compliance measures to ensure their operations comply with laws, regulations, and industry standards that affect their business. Successful companies typically implement internal compliance programs to prevent, detect, report, and mitigate risks.¹ Following laws and regulations plays a key role in maintaining both ethical and legal integrity.

This post outlines key legislation that corporate compliance programs cover and why they’re crucial for you to understand as you complete a master’s degree in legal studies and prepare to move into a corporate compliance role.

Overview of Corporate Compliance 

Corporate compliance refers to the policies and procedures companies use to track and comply with applicable laws and international, federal, and state regulations. A robust compliance program sets clear expectations for organizational and employee conduct and creates detailed processes for identifying and addressing risk.

These programs protect organizations from legal exposure by preventing misconduct before it occurs. They also allow companies to detect issues early when they do arise to prevent them from spiraling out of control.

Training, internal reporting systems, and oversight are key components of a strong corporate compliance system. When executed well, they limit the risk of being subject to fines, lawsuits, and reputational harm.

Major U.S. Corporate Compliance Laws

Organizations must account for federal and international laws when developing their corporate compliance programs:

Sarbanes-Oxley Act (SOX)

SOX requires public companies to maintain accurate financial records, establish internal controls over financial reporting, and certify the accuracy of disclosures. The act establishes criminal penalties for executives who knowingly certify non-compliant financial reports.¹

Foreign Corrupt Practices Act (FCPA) 

The FCPA prohibits bribery of foreign officials and requires companies to maintain records that accurately reflect their transactions. This act applies to U.S. companies and individuals, as well as foreign entities listed on U.S. stock exchanges or that make debt offerings in the United States.²

Dodd-Frank Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act introduced significant regulatory changes to the financial industry in response to the relaxed oversight of financial institutions that led to the burst of the housing bubble and the resulting financial crisis earlier this century.³ The legislation expanded oversight of financial institutions, created new consumer protection rules, and introduced whistleblower incentives for reporting financial misconduct.⁴

Health Insurance Portability and Accountability Act (HIPAA)

HIPAA establishes national standards for protecting patient health information. Health plans and health care providers that transmit health information electronically must follow strict rules to protect sensitive data.⁵

General Data Protection Regulation (GDPR)

While based in the European Union, GDPR affects U.S. companies that handle personal data from EU residents, which may include their employees, customers, or suppliers. It regulates how organizations collect, process, and store that data.⁶

Industry-Specific Compliance Requirements

General legal obligations apply across industries, but many sectors face specific regulatory compliance requirements. Heightened oversight is widespread in the health care, finance, and technology areas. Their operations have highly sensitive consequences, affecting customers’ health and safety, financial stability, and data integrity.

Health care organizations follow federal billing and fraud-prevention rules enforced by agencies such as the Centers for Medicare & Medicaid Services. Similarly, the Securities and Exchange Commission and the Federal Reserve set disclosure, risk management, and market conduct requirements for financial institutions to follow. Technology companies comply with data security standards that the Federal Trade Commission enforces.⁷

Corporate Governance and Internal Controls

Effective corporate compliance programs start with clear rules for employee conduct, as well as leadership that takes those rules seriously. When managers at all levels reinforce expectations and respond consistently to concerns, compliance becomes a seamless part of normal business operations.

Compliance officers and legal teams can further support strong corporate compliance. They do this by monitoring legal requirements, performing risk assessments, and responding when concerns arise. This comprehensive approach helps companies address issues before they escalate into formal investigations or lawsuits.

Reporting systems also matter. When employees know they can report concerns without fear of retaliation, companies gain early insight into potential problems. A whistleblower protection framework and straightforward reporting process encourage transparency. Furthermore, they enable organizations to correct issues internally rather than learning about them from regulators.

Consequences of Non-Compliance

When companies fall short on compliance, the fallout can extend to all areas of their business. Regulators may impose steep fines or place companies under long-term monitoring. Enforcement actions for violations of corporate regulations can disrupt daily operations and force leadership to divert time and resources away from running the business.

Once an investigation or settlement becomes public, companies often suffer reputational damage. This may lead to investor scrutiny and lost business opportunities.

Recent enforcement actions illustrate the gravity of these compliance risks.

• In 2020, Goldman Sachs admitted to conspiring to violate the Foreign Corrupt Practices Act, and a coordinated resolution with authorities worldwide resulted in fines totaling over $2.9 billion for the company⁸ 
• In 2019, Equifax agreed to pay up to $700 million in a global data breach settlement with the Federal Trade Commission, the Consumer Financial Protection Bureau, and dozens of US states and territories⁹ 
• In 2017, Volkswagen was ordered to pay over $4.3 billion in criminal and civil cases after admitting it used software to cheat U.S. emissions tests¹⁰

Compliance as a Long-Term Business Strategy

Achieving regulatory compliance helps companies identify risks early and avoid costly enforcement actions. Just as importantly, corporate governance supports accountability and builds trust with regulators, investors, and customers. Ultimately, organizations that take their corporate regulation compliance efforts seriously position themselves for greater long-term success.

If you already work as a corporate compliance professional or are looking to get into the space, the University of Pittsburgh School of Law’s online programs offer a path to grow your career in this dynamic space in the business world. Choose from the Online Master of Studies in Law (MSL) program with a Corporate Compliance specialization or the stand-alone Online Certificate in Corporate Compliance. No matter which program you choose, you benefit from small class sizes and individualized attention from experienced faculty who set you up for success during your program and after graduation.

As you consider Pitt Law’s online programs, our admissions outreach advisors are always on standby to answer your questions, clarify admissions requirements, and discuss what this degree can do for you. Schedule a call today.