The Rise of Compliance in Non-Regulated Industries

Compliance Goes Mainstream Across Industries

Once upon a time, “compliance” was a term reserved for heavily regulated fields like banking or healthcare. Today, it’s a watchword in virtually every industry. Companies far outside the traditionally regulated sectors are implementing compliance programs, not because the law demands it, but because doing so makes good business sense. Even without a financial regulator looking over their shoulder, organizations are realizing that proactive compliance can be a competitive advantage and a safeguard against risks. In fact, an estimated 91% of organizations across sectors must follow some form of compliance standards, underscoring that the need for compliance extends well beyond regulated industries. From tech startups to retail chains, a culture of compliance is on the rise.

This shift didn’t happen overnight. Growing public scrutiny, complex global markets, and high-profile corporate scandals have all heightened awareness that “playing by the rules” is everyone’s business. When companies voluntarily meet ethical standards or adopt best practices before any mandate, they often reap rewards in trust and performance. A telling example comes from Microsoft: In 2016, amid debates over AI’s use in weapons, Microsoft voluntarily formed an internal AI Ethics Committee with no regulator forcing their hand. Executives believed that “great companies don’t just follow laws; they help shape the future by doing what’s right when no one’s watching”. This bold ethical stance bolstered Microsoft’s reputation as a leader in responsible innovation and even helped attract top talent. Such stories illustrate a broader trend, compliance isn’t just about avoiding penalties; it’s becoming a hallmark of good corporate citizenship and savvy management in all industries.

Why the change? As we’ll explore, factors like consumer trust, risk management, and global standards are pushing even unregulated businesses to “get compliant.” The cost of ignoring compliance can be steep: studies show non-compliance costs businesses about 3.5 times more than the cost of compliance on average (roughly $820 per employee for non-compliant firms vs. $222 for compliant ones). The writing is on the wall, embracing compliance proactively is far better than reacting to a crisis later.

In the sections that follow, we’ll discuss what compliance means in a general business context, the drivers behind its spread to every industry, and how it benefits organizations. We’ll also look at the crucial role of HR professionals and leaders in fostering a compliance culture, and provide tips to overcome challenges when implementing compliance programs in “unregulated” settings.

In regulated sectors (like finance, healthcare, or aviation), compliance usually means following laws and oversight from government or industry bodies. But what does “compliance” mean for businesses that aren’t heavily regulated? Broadly, it covers two dimensions:

• Regulatory compliance: Adhering to external laws and regulations (e.g. labor laws, consumer protection rules) that apply to all businesses in a jurisdiction. Even “unregulated” industries must comply with general laws, for instance, every company has to follow employment laws, safety regulations, and basic financial reporting rules. Failure here can lead to fines, legal action, or worse.
  
• Corporate (internal) compliance: Following your own company’s policies, ethical standards, and procedures. Corporate compliance programs set internal rules of conduct (e.g. codes of ethics, data security policies) even when not dictated by law. This internal compliance is crucial for any business; without it, a company can quickly descend into chaotic or unethical practices. In other words, you need to enforce the standards you set for yourself.
  

Larger companies often formalize both types of compliance by appointing a compliance officer or team (sometimes within the HR or legal department) to oversee compliance efforts. But even smaller firms benefit from assigning someone the responsibility of keeping the organization on the straight and narrow — supported by clear policies and regular Compliance Training to ensure everyone understands their obligations.

What’s driving compliance into every industry is the realization that good governance and ethical practices are not optional. For one, no industry is truly free of external rules: data privacy, anti-bribery laws, tax rules, etc., apply to nearly everyone. Additionally, many firms choose to voluntarily adopt standards (like ISO quality certifications, environmental guidelines, or cybersecurity frameworks) to signal reliability. For example, a software company might pursue SOC 2 or ISO 27001 certification for information security compliance, not because a law demands it, but because it assures clients their data is safe.

Crucially, as businesses go global and digital, they face a patchwork of regulations and expectations. A company in a lightly regulated industry at home might still need to comply with stricter rules when serving international customers. For example, a U.S. retailer handling EU customer data must comply with the EU General Data Protection Regulation (GDPR), even if domestic law imposes fewer requirements. Many such firms choose to apply GDPR-level protections to all users worldwide as a matter of trust and consistency.

Surveys such as the 2023 Cisco Data Privacy Benchmark Study show that most organizations now view privacy and security compliance as essential business requirements—both to meet legal obligations and to satisfy customer expectations. In practice, leading data protection frameworks like GDPR and California’s CCPA/CPRA have set global benchmarks, making compliance with high privacy standards the new norm across industries.

The bottom line is that compliance is no longer a concern only for “regulated” businesses. Whether due to global supply chains, digital operations, or stakeholder pressures, most organizations find that they have standards to meet. Even if the government isn’t requiring a formal compliance program, savvy companies implement one anyway, to stay ahead of risks and to run a better business. A survey of risk and compliance professionals found that in recent years there’s been a shift from basic, check-the-box compliance to a more strategic approach, integrating compliance into core business strategy. In other words, rather than seeing it as a necessary evil, companies are viewing compliance as a strategic asset.

Why are businesses outside highly regulated sectors suddenly so interested in compliance? Several key drivers are behind this trend:

• Earning Customer Trust: In an age of data breaches and corporate scandals, the public is skeptical. Customers and clients want assurance that companies will do the right thing. For instance, 70% of Americans feel their online data is less safe now than in the past and a striking 92% of consumers say companies must be proactive about data protection, not just wait for laws to force them. Such expectations mean a company that voluntarily beefs up its privacy or security practices can win trust. Showing that you comply with strict standards (even if not required) sends a message: we value your safety and privacy. This is especially important for HR professionals communicating workplace policies to employees, or for businesses wooing clients with security concerns. Transparency and ethical conduct have become key to brand reputation.
  
• Risk Management and Avoiding Scandals: Every organization faces operational and legal risks, from workplace accidents to fraud to IT security failures. Compliance programs help identify and mitigate these risks before they explode into crises. No external regulator might be forcing a given policy, but smart leaders ask: what could go wrong, and how do we prevent it? Whether it’s instituting anti-harassment training or quality control checks on products, proactive compliance can save a company from disasters that destroy value. The cost of non-compliance can be far higher than compliance costs when you factor in legal penalties, downtime, and reputational damage. As noted earlier, one study found non-compliant firms incur on average 3.5 times more costs than compliant ones due to fines, business disruption, and lost productivity. For business owners, that’s a strong financial incentive to invest in compliance measures even if no one is forcing you.
  
• Anticipating Future Regulations: Today’s voluntary best practice often becomes tomorrow’s law. Forward-thinking companies would rather get ahead of impending regulations than play catch-up later. By tracking emerging trends (for example, new environmental rules or AI ethics standards on the horizon) and self-regulating early, organizations can smooth out transitions. This was exactly Accenture’s logic when in 2018 it committed to achieving net-zero carbon emissions by 2025, years before any law required it. This wasn’t mere altruism; it was strategic foresight. By acting early on sustainability, Accenture attracted environmentally conscious clients and even saw revenue jump 8% the next year. The lesson is clear: complying “before you must” prepares your business for the future and can yield competitive gains in the meantime.
  
• Market and Partner Requirements: Many industries impose compliance indirectly through the supply chain. A small manufacturer might not be regulated, but if it wants to supply parts to an automotive or aerospace giant, it must adhere to that client’s strict quality and safety standards. Similarly, companies seeking enterprise customers often need compliance certifications to pass vendor security reviews. In practice, to do business in certain markets, you have to show compliance, be it with data security, ethical sourcing, or quality management systems. Voluntary compliance thus becomes a ticket to play in lucrative markets or partnerships. For example, a cloud software provider might voluntarily undergo a SOC 2 audit or obtain ISO certifications so that big banks (which are regulated) feel comfortable buying from them. No government told the provider to do that, but market forces did.
  
• Investor and Workforce Pressure (ESG and Ethics): Environmental, Social, and Governance (ESG) criteria have moved into the mainstream. Investors, boards, and even employees increasingly demand that companies act responsibly. According to recent surveys, over half of investors (around 53%) prioritize ESG principles in their decisions. This means businesses feel pressure to comply with ethical norms (like reducing carbon footprint, ensuring diversity and fair labor practices) even when not legally mandated. Likewise, employees, especially younger generations, want to work for companies that do the right thing. Voluntary compliance with ethical standards (say, not sourcing from conflict minerals, or paying living wages in the supply chain) helps attract talent and avoids public backlash. In short, doing good is good for business.
  
• Complex Operating Environments: Modern businesses operate in a world of Big Data, AI, and rapid innovation that often outpaces regulation. In uncharted territory (like AI development, for example), there may be no clear laws yet, but there are certainly risks, both ethical and operational. Companies are creating their own compliance guardrails to navigate these complexities safely. The formation of Microsoft’s AI Ethics Committee mentioned earlier is a prime example of self-imposed compliance in a tech domain that governments hadn’t regulated yet. By setting internal rules (e.g., on responsible AI use), companies can steer clear of missteps that could invite harsh regulation later. Essentially, those who act before laws demand it become part of shaping the standards, rather than scrambling to meet standards set by others.
  

All these drivers boil down to one realization: proactive compliance turns potential pitfalls into opportunities. It’s no longer seen as just cost or red tape. In fact, 83% of risk and compliance professionals say keeping their organization fully compliant is essential when making business decisions, illustrating how core compliance has become to strategy. Companies are leveraging compliance efforts to enhance decision-making, build trust, and even drive performance. We’re seeing a clear pivot from a “have to do it” mindset to a “want to do it for our own success” mindset.

When a company goes above and beyond minimum requirements, what do they get in return? As it turns out, quite a lot. Here are some key benefits of instituting strong compliance programs, even when not strictly required, and evidence of those benefits in action:

• Competitive Advantage and Reputation: Being an early adopter of high standards can set you apart from competitors. Companies that voluntarily comply with emerging rules or industry best practices often enjoy a period of differentiation. For example, when data privacy laws like California’s CCPA were new, some companies outside California chose to comply across the board. Those proactive firms won consumer favor and were seen as trusted brands. Research confirms that companies who lead on compliance gain market trust, consumers reward businesses they believe are protecting their interests. In one survey, the vast majority of consumers reported they are more likely to support businesses that are proactive about data protection and privacy. Additionally, if a new law does hit, compliant companies won’t scramble and can continue business as usual while laggards play catch-up. This was highlighted in an industry report: over 70% of corporate compliance professionals observed that moving from a checkbox approach to a strategic compliance approach has allowed compliance to serve as a competitive business advantage. In essence, being better at compliance can help you win customers and outpace rivals.
  
• Risk Reduction and Cost Savings: Strong compliance programs act like an insurance policy, preventing incidents that could cost millions. The absence of immediate regulation doesn’t mean absence of risk. Whether it’s preventing a cybersecurity breach or avoiding an HR lawsuit, compliance measures save money by heading off trouble. The cost of non-compliance is not just fines; it’s business disruption, lost trust, and damage control. Consider the Ponemon Institute’s findings: companies that neglect compliance end up paying far more, on average 3.5 times more, in penalties, downtime, and liabilities than those that invest in compliance upfront. For a real-world example, look at health and safety compliance: a manufacturer that voluntarily enforces stringent safety protocols will have fewer accidents, which means less downtime and fewer compensation claims. Or in HR, rigorous anti-discrimination compliance can prevent costly lawsuits. Avoiding one big scandal or legal case can justify years of compliance investment. Moreover, many regulators offer leniency to companies that demonstrate good-faith compliance efforts (even if something goes wrong). In some U.S. states, for instance, companies that self-report issues under voluntary compliance programs can receive reduced fines. So being proactive not only reduces the chance of problems, it can soften the blow if a problem occurs.
  
• Operational Efficiency and Growth: It may sound counterintuitive, but compliance can streamline operations. When you have clear policies and standardized procedures, there’s less chaos and confusion in day-to-day work. A company without internal compliance is prone to wasteful, disorganized practices, employees might cut corners or do things their own way, leading to inconsistencies and errors. Implementing compliance (like standardized workflows, checklists for quality, proper training programs) often improves efficiency and consistency. Additionally, being compliant ahead of time means you won’t be abruptly pulling resources to fix gaps when a new law or requirement hits. As one analysis noted, voluntary compliance allows you to avoid last-minute scrambles and disruptions, so you can focus on growth instead of firefighting. Companies that integrate compliance into their processes can adapt more smoothly to changes (e.g., a new software rollout that meets security standards from day one, rather than retrofitting it later). In short, good compliance is part of good operations management, it creates a stable platform for the business to grow upon.
  
• Easier Market Expansion and Partnerships: If you plan to expand your business to a new region or industry, complying with standards in advance can be a golden ticket. For example, a U.S. company eyeing the European market might voluntarily become GDPR compliant early. This not only avoids a frantic overhaul later, but signals to European partners and customers that you’re ready to do business responsibly. It’s much easier to enter a new market when you already meet its regulatory expectations. Similarly, larger enterprises often require smaller partners to adhere to certain codes of conduct (like anti-corruption policies or sustainability criteria). If you’ve preemptively adopted those, you become an attractive partner. One concrete example: many companies now have environmental sourcing standards, a packaging supplier that has already gone green (e.g., eliminated certain toxic materials ahead of any mandate) will have an edge in securing contracts. Compliance opens doors.
  
• Reputation and Stakeholder Confidence: Ethical compliance builds a strong reputation with the public, regulators, and investors. When a company consistently “does the right thing” even without being forced, it earns goodwill that can be invaluable in a crisis. Engaging in voluntary compliance initiatives, say a voluntary environmental audit or social responsibility report, enhances credibility. Stakeholders see the company as transparent and principled. One need only look at how brands like Patagonia or Unilever have cultivated loyal followings partly through voluntary commitments to sustainability or fair labor (often going well beyond what laws require). In the long run, this trust pays off through customer loyalty, easier hiring, and even higher investor valuations. In today’s world of social media, a good reputation is a priceless asset that compliance can help build. As an example, when Etsy voluntarily published its workforce diversity metrics and pay gap figures, it drew praise from consumers and employees alike, and even saw a spike in site traffic as socially conscious buyers showed support. This kind of positive attention is hard to buy with marketing alone; it’s earned by actions.
  
• Resilience to Regulatory Change: One more benefit, companies that embed compliance deeply are less afraid of new regulations. If you’ve already internalized a culture of meeting high standards, then when regulators up the ante, you’re largely prepared. This agility is a competitive advantage in heavily evolving fields. For example, in cybersecurity, new standards emerge every year. Organizations that treat compliance as a continuous process (rather than a one-time checkbox) can adapt quickly to new rules. In fact, in one report 77% of organizations said they plan to update to new versions of compliance frameworks within allowed periods, showing proactive adaptation, but a worrying minority wait until an audit forces them. The leaders who update early will clearly fare better. Overall, a robust compliance foundation makes a company nimble and less likely to be caught off-guard by change.
  

In sum, voluntary and proactive compliance transforms compliance from a cost center into a value driver. It helps avoid losses, boosts efficiency, engenders trust, and positions a business as a leader. As one former executive put it, it’s about asking “What legacy do we want to create?” instead of waiting for a fine to force your hand. Acting on that mindset can truly future-proof an enterprise.

To illustrate, consider a final real-world case: Netflix, not bound by any law, introduced an extremely generous parental leave policy in 2015 (allowing new parents up to a year off). This was voluntary, well beyond standard practice. CEO Reed Hastings noted that what seemed like a costly benefit was actually an investment in employee loyalty and creativity. Netflix’s move helped retain top talent and set a trend in the tech industry. The story underscores that going beyond compliance, doing more than the minimum, often yields returns in workforce morale and innovation, which are hard to quantify but very impactful. Compliance, at its heart, is about building a principled, well-run business, and that is simply good business.

For any compliance initiative to succeed, people inside the organization need to live it day-to-day. This is where Human Resources (HR) professionals and organizational leaders play pivotal roles. In many companies, especially those without a dedicated compliance department, HR often becomes the de facto compliance guardian.

HR’s crucial role: HR managers are deeply involved in crafting and enforcing internal policies, from the employee code of conduct to training and record-keeping, which are all elements of compliance. It’s no surprise that HR managers are frequently tasked as compliance overseers within corporations. They sit at the intersection of company policy and employee behavior: they onboard new hires with the company’s rules, conduct training on topics like harassment or data security, and ensure policies stay updated with changing laws. In essence, HR keeps the corporate compliance engine running.

Some of the key compliance-related responsibilities that fall to HR include:

• Staying up-to-date on labor and employment laws: Even if your industry isn’t regulated, every business must comply with laws on wages, overtime (Fair Labor Standards Act), family leave (FMLA), anti-discrimination (EEO laws, ADA), workplace safety (OSHA), and more. HR must monitor changes in these laws and adjust company policies accordingly. For example, if a city passes a new paid sick leave ordinance, HR ensures the company complies. This legal compliance is foundational; without it, you risk lawsuits or fines. HR professionals ensure the baseline regulatory compliance is met across the organization.
  
• Developing and updating internal policies: HR often drafts the employee handbook, code of ethics, IT usage policies, etc. This internal policy framework is a big part of corporate compliance. As business goals or risks evolve, HR helps revise policies (in collaboration with legal or compliance experts) and communicates changes to staff. For instance, if the company decides to adopt a stricter data protection policy, HR will disseminate it, perhaps via training modules. According to a compliance survey, implementing a demonstrably compliant culture was cited by 58% of compliance officers as a top area of involvement, HR’s work on clear policies and culture is central to that.
  
• Training and awareness: A policy is only effective if employees understand and follow it. HR ensures there are training programs for various compliance areas, be it cybersecurity awareness, diversity and inclusion, anti-fraud, or safety drills. Regular training keeps compliance top-of-mind. Indeed, 60% of risk and compliance professionals plan to prioritize cybersecurity training for employees in the next few years, highlighting an area HR will likely coordinate. HR can integrate compliance topics into onboarding for new hires and schedule annual refreshers so no one forgets their responsibilities. Well-trained employees are the first line of defense against compliance breaches (for example, an employee who knows phishing red flags is less likely to cause a data breach).
  
• Monitoring and enforcement: HR is often where complaints or issues are reported (e.g. an employee reports a safety concern or an ethics violation to HR). HR needs protocols to investigate and address these in line with company policy and legal requirements. Additionally, HR might conduct periodic audits of employee compliance, checking that certifications are current, forms are signed, or that teams are following procedures. In smaller firms, HR may coordinate with department managers to spot-check compliance (like confirming everyone took the mandatory training). In larger ones, HR might partner with an internal audit or compliance officer for monitoring. Either way, HR helps ensure the rules on paper translate into actions in practice.
  
• Being the liaison with leadership: HR often reports to or sits alongside top leadership when it comes to compliance status. They may present data on compliance (training completion rates, any incidents, etc.) to the executive team or board. If HR identifies a compliance risk, say, a trend in exit interviews about unethical sales practices, they elevate it so leadership can respond. Conversely, leaders rely on HR to implement the “tone at the top.” A company’s leadership might declare, “We commit to an ethical, compliant culture”, but HR helps embed that into everyday processes and communications so that tone resonates at every level.
  

Now, speaking of leadership, executives and managers have an equally critical role. Compliance culture starts at the top. If the CEO and senior leaders treat compliance as mere paperwork or, worse, ignore it, employees will follow suit. On the other hand, when leadership visibly prioritizes doing things right, it sets the expectation for everyone else. Leaders should champion compliance by allocating resources to it, incorporating it into strategy discussions, and exemplifying ethical behavior themselves. A striking statistic from a Navex Global report noted that 76% of compliance and risk professionals consider an ethical culture of compliance essential in decision-making. This “culture of compliance” must be nurtured by leadership through consistent messaging and decisions that reinforce values over short-term gains.

It’s also worth noting that organizational structure can reflect leadership’s stance on compliance. Some companies create an independent compliance function reporting directly to the CEO or board (about 22% of firms do this), signaling top-level commitment. Others place compliance under departments like IT/security, legal, or HR. There’s no one-size-fits-all, but regardless of where it sits, cross-department collaboration is key. For instance, HR might work with IT on data protection policies (HR trains users, IT implements technical controls), a combined effort ensures both human and technical aspects are covered.

For HR professionals reading this, the takeaway is: you are likely the torchbearer for compliance in your organization’s daily life. By keeping policies updated, educating the workforce, and maintaining open lines for issues, HR ensures compliance isn’t just a manual on a shelf but a living part of the company culture. For business owners and leaders, the message is: empower your HR and compliance teams, listen to their insights, and lead by example. When employees see that leadership cares about integrity, like not cutting corners to meet targets, or being transparent when mistakes happen, it reinforces everyone’s commitment to compliance. Remember, compliance is ultimately about people doing the right thing; HR and leaders together make that possible by creating an environment where the right thing is the norm.

Adopting a compliance mindset in a business without external mandates can be challenging. Often, smaller companies or those in emerging industries might think, “Isn’t this overkill? We don’t have a regulator watching us.” Overcoming that inertia requires recognizing both the risks of inaction and the manageable steps to build compliance gradually. Here are some common challenges and best practices for implementing compliance programs in less-regulated settings:

Challenges to Anticipate:

• Resource Constraints: Without a legal requirement, companies may hesitate to invest time and money in compliance infrastructure. There may be no full-time compliance officer, and duties might fall on an already busy HR or operations manager. Limited budgets can lead to compliance feeling like a “burden”, indeed, about 74% of organizations say compliance is resource-intensive and burdensome. Solution: start small and focus on highest-risk areas. You don’t need a massive program on day one. Perhaps prioritize a few key policies (e.g. data security and HR conduct) and build from there. Over time, success in those areas can justify expansion.
  
• Lack of Expertise: In unregulated industries, there may be less institutional knowledge about compliance. Employees might not even know what certain compliance acronyms mean. There’s a learning curve to understanding frameworks or regulatory landscapes. Solution: leverage external resources. Consider training for your team or hiring a consultant to do a risk assessment. There are plenty of guides and templates available (many industry associations publish compliance checklists for members). Additionally, technology can help, compliance management software or even simple tools like policy tracking spreadsheets can keep things organized for a lean team.
  
• Cultural Resistance: Employees (or even managers) might initially resist new rules or “red tape”, especially if they’ve operated informally for years. “Why do we need to fill out this checklist? We’ve done fine so far!” is a common refrain. Solution: communicate the why behind compliance initiatives. Tie it to company values and success. For example, explain that documenting processes isn’t bureaucracy, it ensures quality and consistency that will help the company grow and not depend on any one hero employee. Share stories of compliance failures that hurt companies, to illustrate what you’re trying to prevent. And importantly, get buy-in from influential leaders or team members who can champion the effort. If the CEO or owner is visibly on board, others will follow.
  
• Keeping Up with Change: Compliance is not a one-and-done task; it requires maintenance as laws change or the business evolves. In a smaller firm, it can be hard to continuously monitor regulatory news or industry standards updates. Solution: assign responsibility clearly. Even if it’s not someone’s full-time job, make compliance monitoring part of a role (e.g., HR director will review relevant legal newsletters monthly, IT manager will track cybersecurity best practices, etc.). There are also subscription services and alerts you can use to stay informed about legal changes in your domain. Being proactive here prevents falling behind, recall that some firms admitted they wait until an audit or issue forces change, which is risky. Instead, set a review calendar (quarterly or biannually) to update policies and assess new risk areas.
  

Best Practices for Building Compliance Programs:

• Start with a Risk Assessment: Identify what compliance areas are most relevant for your business. Is customer data your biggest vulnerability? Or workplace safety? Or perhaps financial controls? Conduct a simple risk brainstorm: list potential things that could go wrong (data breach, harassment incident, product quality failure, etc.) and gauge their likelihood and impact. This will highlight priorities. Focus your initial compliance efforts on the top few risks. By addressing those with policies and controls, you cover the most ground with limited resources.
  
• Develop Clear Policies and Procedures: For each priority area, write down the rules and processes employees should follow. Keep them clear and concise, a checklist, a one-page policy, or a Standard Operating Procedure (SOP) document can suffice. The key is to define expected behavior. For example, a small business might create an IT security policy requiring strong passwords and software updates, or an ethics policy forbidding conflicts of interest. Make sure to include who is responsible for what (e.g., managers must enforce time-sheet accuracy, finance head must review expenses over X amount, etc.). Documentation is the backbone of compliance, if it’s not written down, it’s hard to enforce or prove later.
  
• Train and Educate: Roll out your new policies with proper training. Don’t just email a PDF; hold a meeting or an online training session to walk employees through it, and why it matters. Encourage questions. This is where HR can really shine by making training engaging, using real scenarios, quizzes, etc. Also incorporate compliance topics into onboarding for new hires so they learn the culture from day one. Remember, 73% of business leaders say meeting compliance standards improves how their business is perceived, when employees understand that compliance is part of the company’s identity, they’ll help uphold it and even boast about it externally.
  
• Foster a Speak-Up Culture: Encourage employees to report issues or suggestions related to compliance. Maybe an employee notices a step being skipped on the factory floor that could lead to a quality problem, there should be a channel (even as simple as talking to HR or using an anonymous suggestion box) for them to raise it without fear. Respond to such inputs constructively. A culture where people aren’t afraid to admit mistakes or point out concerns is a culture that can fix problems early, a hallmark of compliance. Many big corporate disasters could have been averted if employees felt safe to speak up. So even in a small company, nurture that openness.
  
• Leverage Technology and Tools: As your compliance activities grow, consider tools that can lighten the load. This could be as straightforward as a shared calendar with compliance deadlines (e.g., dates for license renewals, audit schedules) or a cloud folder for policy documents so everyone can access the latest versions. For slightly larger operations, specialized software can automate reminders (for training refreshers, document sign-offs, etc.) and maintain audit trails. The right tools can make compliance more efficient and less error-prone, and efficiency is especially important in resource-strapped environments.
  
• Benchmark and Seek Help from Peers: See what others in your industry or region are doing. Are there voluntary industry standards? (e.g., a trade association code of conduct that you can adopt). Networking with peers or attending industry workshops can provide insight into managing compliance effectively. Sometimes, industries develop self-regulatory programs, participating in those can give you structure and recognition. Also, don’t shy from consulting experts for specific needs. Need to draft a data policy? Maybe consult a legal expert for a few hours to ensure you cover key points. It’s a worthwhile investment to set the correct foundation.
  
  

Implementing compliance in an unregulated industry is a journey, not a sprint. Start with small, meaningful steps, “start small but intentional,” as one guide advises. For example, if environmental impact is a concern, begin by phasing out a known harmful material in your product line, like Patagonia’s initiative to replace all synthetic fibers with recycled ones. If diversity is a value, maybe voluntarily conduct a pay equity analysis and share results, following the example of Etsy’s transparent reporting. These actions not only improve compliance posture but also send a message about your brand values.

Keep in mind, voluntary compliance isn’t about perfection or altruism, it’s about resilience and long-term thinking. There may be upfront costs or efforts, but they are usually repaid over time through avoided problems and enhanced reputation. And even though you might not have a regulator, you do have stakeholders (customers, employees, partners) who are effectively “regulating” your business by choosing to trust and support you, or not. Impress them by holding your company to high standards.

As compliance practices spread into non-regulated industries, we’re witnessing a fundamental shift in mindset. No longer seen merely as a box-ticking obligation, compliance is now viewed as an opportunity, an opportunity to strengthen one’s business, foster trust, and differentiate from competitors. HR professionals and business leaders are at the forefront of this movement, turning compliance from a niche legal concern into a core component of organizational culture and strategy.

The rise of compliance outside traditional arenas is ultimately about businesses raising their own bars. It’s about realizing that doing things right, before anyone forces you to, is a savvy strategy in its own right. As Paul Polman, former Unilever CEO, famously suggested, companies focused on long-term value won’t wait for regulations to impose changes. Those who wait may already be left behind. Conversely, those who act early often find that early action builds trust and future-proofs the business. Each company that voluntarily adopts higher standards is not just avoiding risk; it’s actively shaping a legacy of integrity and agility that stakeholders appreciate.

For any HR manager persuading their CEO to invest in a compliance initiative, or any business owner debating if it’s worth the hassle, consider the countless headlines of companies caught unprepared, facing public outrage or massive fines. Then consider the quiet success stories of companies that never made those headlines because they had their house in order. Compliance done right won’t make news, and that’s a good thing. It means your company is steering clear of landmines and instead focusing on innovation and service.

In closing, we circle back to the core idea: no company has ever regretted leading with conscience. Doing the right thing tends to pay dividends, whether in customer loyalty, employee morale, or simply the confidence of knowing your business can weather storms. In the evolving landscape of business, where reputations are fragile and trust is hard-earned, proactive compliance is like a sturdy anchor. It keeps you grounded on ethical practice and prepared for the unexpected. What was once seen as a cost center can indeed become a source of strength and opportunity.

The rise of compliance in non-regulated industries is really the rise of better business. It’s a positive development, signaling that more companies aspire to uphold high standards even when nobody’s watching. And as more do so, they collectively elevate the norms of their industries, benefitting consumers, employees, and society at large. Compliance, in the end, is about accountability, and embracing it willingly is the mark of a responsible, future-ready enterprise.

FAQ

What does compliance mean for non-regulated industries?

For non-regulated industries, compliance involves following general legal requirements such as labor, safety, and data privacy laws, as well as adhering to internal policies and ethical standards. Many companies also voluntarily adopt industry best practices to build trust and reduce risks, even when not legally required.

Why is compliance becoming important in unregulated sectors?

Compliance is growing in importance due to factors like consumer trust, risk management, global market demands, investor pressure for ESG standards, and anticipating future regulations. Businesses are realizing proactive compliance helps avoid costly issues and enhances their reputation.

How can compliance benefit a business that isn’t regulated?

Proactive compliance offers benefits such as competitive advantage, risk reduction, operational efficiency, easier market entry, and improved stakeholder trust. It also prepares businesses for potential future regulations without last-minute disruptions.

What role does HR play in ensuring compliance?

HR is often responsible for developing and updating policies, training employees, monitoring adherence, and staying updated on relevant laws. In many companies, HR acts as the central point for embedding compliance into daily operations and culture.

What are the best practices for implementing compliance in unregulated industries?

Best practices include starting with a risk assessment, creating clear policies, providing ongoing training, fostering a speak-up culture, using compliance tools, and benchmarking against industry peers. This approach ensures gradual and sustainable compliance adoption.