We were curious about this and asked around. We got a lot of different answers. Some said that it was knowing all of the various laws that have to be complied with. Some others said that it was trying to control the behavior of all of the different employees. Other said that it was keeping the employee handbook and office policies up to date.
The best response we received was this: getting it into the heads of employees and managers alike that the workplace is inherently and legally a different place than the home, the neighborhood tavern, the poker group or the social club. Behavior that is appropriate to those other places or in other situations may not be appropriate in the workplace. Jokes that are appropriate in other places may not be appropriate at work (no matter how funny), whether on the work floor or by the water cooler.
Because the workplace is a place where people go to make a living and support themselves and their families, pursue their jobs and professions, and produce goods or deliver services necessary for society, it must be a place where the playing field is level, where people of, for example, all races, ages, gender orientations or disabilities should be allowed to be all they can be and do all they can do without fear of harassment or discrimination. In short, it must be a place with sometimes strict rules and/or standards of behavior that may not exist in other places or may be silly or stilted in other places but must be adhered to so that no one is uncomfortable simply by being a member of a protected class.
And people being people, oftentimes that can be pretty hard to achieve.