What is the consequence of failing to address compliance risks?

Failing to address compliance risks can lead to significant potential financial or reputational loss for an organization. When compliance risks are overlooked, it often results in violations of laws and regulations, which can incur costly fines and sanctions. Additionally, non-compliance can damage an organization's reputation, leading to a loss of trust among customers, partners, and investors. This diminished reputation not only affects current business relationships but can also hinder future opportunities. Overall, addressing compliance risks is essential for maintaining a sound financial footing and ensuring the organization's credibility in the market.

The other choices suggest outcomes that are unlikely or contrary to the effects of neglecting compliance. Improved employee morale, increased organizational efficiency, and enhanced stakeholder relationships are generally associated with effective compliance and ethical practices rather than the consequences of failing to address risks.