What is the relationship between compliance and operational risks?

The relationship between compliance and operational risks is well established, particularly in the context of minimizing legal and regulatory risks. Compliance frameworks are designed to ensure that organizations adhere to laws, regulations, and internal policies, which in turn helps to mitigate potential legal consequences. By maintaining compliance, an organization can avoid penalties, fines, or legal actions that may arise from non-compliance, thus reducing its overall legal risks.

Additionally, compliance efforts often lead to improved operational processes as organizations develop clear protocols and standards for operation. While other options discuss potential complications or relationships that do not hold true in most scenarios—like suggesting that compliance complicates decision-making frameworks or increases operational risks—the primary benefit of compliance is its role in safeguarding against legal risks, enhancing the organization’s stability and operational efficiency.