23
Oct
2024
Data Analytics for...
Legal & Compliance
Legal & Compliance refers to an organization’s adherence to laws, regulations, and industry standards while conducting business. It encompasses compliance with local and international legal frameworks, regulatory requirements, ethical practices, and governance structures. A robust Legal & Compliance framework mitigates risks, enhances business credibility, and ensures sustainability.
What We're Measuring
Legal & Compliance evaluates whether a business operates within regulatory frameworks, adheres to industry standards, and manages legal risks effectively.
This determinant covers governance structures, contractual integrity, data protection, environmental compliance, labor laws, and ethical conduct.
It ensures the business is not only legally sound but also trusted, transparent, and accountable.
How We Analyze It
We review key indicators such as Regulatory Breach Incidents, Compliance Audit Scores, Policy Coverage, Contract Risk Exposure, and Litigation Frequency.
We also assess governance maturity through metrics like Board Independence, Whistleblower Protection Mechanisms, and Training Coverage on Legal Standards.
These are aggregated into a Legal & Compliance Risk Index, which helps gauge both current risk exposure and forward-looking compliance posture.
What It Tells You
Strong Legal & Compliance performance signals operational stability, risk resilience, and leadership integrity—key factors for investor confidence and long-term sustainability.
Weak performance can expose the business to costly penalties, reputational damage, or operational shutdowns.
This determinant acts as a safeguard, highlighting areas that need legal reinforcement or governance reform before they escalate into crises.