#### Definition: Compliance refers to the adherence to legal requirements, regulatory standards, and internal company policies.
#### Details: A functioning compliance system protects against legal, financial, and reputational risks.
- Data protection, anti-corruption, IT security
- Environmental, Social, and Governance (ESG) standards
- Documentation and control obligations
#### Relevance in a transaction context: Compliance is a critical part of due diligence. Weaknesses can lead to purchase price reductions, provisions, or contractual warranties. > Example: Missing internal policies or controls can deter investors or present deal risks.