What Are Compliance Risks? Risk Types, Areas & How to Manage

What are the types of compliance risk?

Addressing the many compliance risk areas with a standardized taxonomy is critical for risk and compliance leaders for several reasons. First, defining compliance risks using the standardized Risk Categories and Risk Types helps intake and investigation personnel properly categorize the report so the follow-up is appropriately routed and prioritized. Another benefit comes from the ability to accurately benchmark your program against a global standard, allowing you to assess your program’s performance against peer organizations accurately. Taken together, these benefits of using standardized compliance risk areas will help you streamline your investigations and uplevel your benchmarking.  

NAVEX is the global leader in whistleblowing and incident management benchmarking, with the world’s largest data set (2.15 million reports received in 2024). Along with our world-class benchmark data, we are also the leader in Risk Type categorization. NAVEX Risk Types serve as a common risk taxonomy, standardizing how organizations capture and categorize risk and compliance data. This consistency delivers reliable, actionable insights across programs and teams, enabling leaders to move beyond isolated data points toward a unified view of risk.  

Let’s unpack the different types of compliance risk NAVEX has embedded in our Whistleblowing & Incident Management solution, which are also reflected in our annual Whistleblowing & Incident Management Benchmark Report.

Expanding on the compliance Risk Types 

Within those risk categories is the more specific categorization of your compliance risk. Below are the compliance Risk Types and their definitions. 

Business Integrity 

Conflicts of Interest

Reports about a conflict of interest, either a self-report or a report involving the behavior of others. A conflict of interest can arise in any situation where an employee’s financial or personal interest could interfere with their business judgment or the organization’s interests.  

Confidential and Proprietary Information 

Reports related to confidential and proprietary information or intellectual property. Confidential information is any non-public information not intended or permitted to be shared beyond those with a genuine business need to know it.  

Confidential information can include information about people or companies and specifically includes business plans, trade secret information, customer lists, sales and marketing strategies, pricing, product development plans, and any notes or documentation of the foregoing.  

Intellectual property refers to an original, intangible creation of human intellect legally protected from unauthorized use. Intellectual property includes patents, trademarks, and copyrighted works of authorship, such as photographs, music, literary works, graphic design, source code, and audio and audiovisual recordings.  

Data Privacy and Protection

Reports related to the rights and responsibilities relating to data held or processed by an organization. This data can include information about employees, customers, consumers, or others. Examples include allegations of data misuse, loss or theft of data, breaches or attempted breaches, or requests by an individual relating to their own data.  

Free and Fair Competition 

Reports involving activities that undermine free and fair competition in the marketplace. These activities frequently involve any agreement with a competitor to fix prices or otherwise limit competition. Even the appearance of such an agreement is problematic.  

Bribery and Corruption 

Reports of public or private instances of bribery. Bribery occurs when a person offers money or something else of value – to an official or someone in a position of power or influence – to gain influence over them. Corruption includes dishonest or illegal behavior – especially of people in authority – using their power to do dishonest or illegal things in return for money or to get an advantage over someone else.  

Insider Trading 

Reports that a person is buying or selling any company’s (employer’s or any other company’s) securities and/or stock based on non-public information as well as passing (tipping) this information on to someone else who then buys or sells stock. 

Global Trade

Reports related to the import and export of goods and services globally. It can include imports (bringing goods or services into a country) or exports (sending goods or services - including software - from one country to another). This category also includes reports relating to sanctions such as trade sanctions, which make it unlawful to do business with sanctioned people or countries.  

Political Activity

Reports of improper use of employer resources (time, assets, brand, etc.) for political activity (by an individual or an organization) such as using work time for political activities, pressuring colleagues to give money or time to a PAC or associating organization name with a political candidate, official, or group. It can also include misuse of company funds for political activities, using company resources to create or distribute political messages and violations of lobbying regulations and restrictions.  

Human Rights  

Reports related to human rights which generally refer to the basic rights and freedoms of individuals. Examples include reports relating to human trafficking or modern slavery that involve the use of force, fraud or coercion to obtain labor or sex for money, drugs or other goods.  

Product Quality and Safety

Reports about quality and safety issues related to products. Examples include allegations that a product is not safe for intended use, is putting others at risk of harm, or that it fails to meet industry standards. 

Other Business Integrity  

Reports related to business integrity that cannot be categorized elsewhere. Examples include industry specific policies, regulations or laws.

Environment, Health and Safety 

Imminent Threat to a Person, Animals or Property 

Reports of imminent or immediate threat of harm to a person or people, animals or property. Reports may or may not involve a weapon and generally are the kind of incident where authorities (such as police or fire) are called to assist.  

Environmental

Reports about the impact on the environment. This could include intentional, negligent or accidental acts or omissions that harm the environment or violate policy or regulatory or legal requirements. It can also include acts or omissions that otherwise risk the climate. Examples can include spills, mismanaged wastewater or resources, release into the atmosphere of harmful materials or substances, or improper disposal of hazardous waste.  

Health and Safety 

Reports about workplace safety. This can include employee safety and facilities or equipment. Each employee is responsible for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.   

Reports about physical security in a facility.

Accounting, Auditing and Financial Reporting

Reports related to accounting, financial reporting or auditing. Examples include the unethical or improper recording and analysis of the business and financial transactions associated with generally accepted accounting practices. Examples include misstatement of revenues, misstatement of expenses, misstatement of assets, misapplications of GAAP principles, and wrongful transactions. 

Misuse or Misappropriation of Assets

Reports that the organization’s assets are being wasted, inappropriately used, abused, or not properly protected. This category can include many assets such as property, tools, money, credit cards, facilities, company vehicles, employee time, and abuse of employer-provided benefits. 

Other

Reports that do not fit any of the other categories listed.