What is a potential consequence of non-compliance with regulations?

Non-compliance with regulations can lead to serious legal penalties, including fines or sanctions, which are imposed by regulatory bodies to enforce adherence to laws and rules. These penalties serve as a deterrent to organizations that might otherwise ignore compliance requirements. When a company fails to comply with regulations, it can face financial consequences that may include substantial fines, restrictions on operations, or even the suspension of business licenses.

Additionally, legal challenges can arise, which may consume resources and distract from core business operations. This can further have ripple effects on a company's financial health, public image, and operational capability. The obligation to adhere to regulations is therefore crucial, not just for maintaining lawful operations but also for safeguarding the organization against potentially severe financial and reputational damage.