Compliance-innovation: a quality-based route to sustainability

Abstract

The areas of Governance, Risk and Compliance (GRC) and innovation are under-explored in research generally, and specifically in sustainability-oriented research. In this paper we propose a practice-based concept of Compliance-Innovation and set out its significance for sustainability. Development of the concept is based on a literature review and exploratory qualitative research with eighteen practitioners. The concept acknowledges the central role of knowledge integration across business domains as the basis of modern competitive advantage. The absence of such integration in the GRC and innovation domains, revealed in practice, opens opportunities. The governing force for such integration is presented here as sustainability, when applied as a strategic orientation for business. We outline how the integration of GRC and innovation domains drive commercial exploitation for environmental sustainability and business sustainability. Building on the concept of Absorptive Capacity we identify both external and internal sources of knowledge as determinants of organization's selected sustainability goals, which are relevant across the phases of organizations' innovation activities throughout its Innovation Value Chain. We argue that a quality-based orientation is necessary to derive value from the networks employed in applying the concept in practice.