Labor Compliance and the Mercantile Performance

by Fernando Munhoz

The Compliance, increasingly in use in Brazil, is a corporate governance tool that aims to safeguard the civil and criminal responsibility of owners, counselors, and executives from commercial companies, as well as value the  corporate brand.

Some companies, reticent when it comes to the implementation of disciplinary rules, believe that the cost and time for the implementation make this procedure unfeasible. They also ponder on the effects resulting from an eventual increase of the final cost regarding the product or service offered.

However, the compliance implementation effects are extremely satisfactory in the medium and long terms, specially if we consider that the purpose of imposing disciplinary rules aims not only to manage and prevent risky occurrences, but also demonstrate transparency to third parties when it comes to actions carried out by the company, which should be in total consonance with the law, without any intention to favor corruption acts.

In the globalization era it is necessary to respect not only the local rules but also  the rules of the countries where we have importation and exportation businesses. With the advent of the social medias, the companies also face an increasingly exposure of their brands and reputation. In this context, transparency assumes a crucial role, which can impact and cause an eventual  depreciation of the corporate brand.

So, the Compliance techniques prove to be extremely beneficial to the corporate market, not only aiming to manage and prevent risks regarding the actions practiced on a daily basis, but also and mainly providing transparency to the conduct regulation of the internal structures as, for example, the ombudsman, the integrity code, the audit committee, the independent audit. Those techniques ascribe a bigger credibility in the market, aim the accretion of corporate profit and guarantee the legality of business activities in every scopes.

Fernando Munhoz is an expert in labor law in collaboration with Sérgio Eliezer Pelcerman at Almeida Prado & Hoffmann Advogados Associados office