MAKING SENSE OF THE INCREASINGLY COMPLEX COMPLIANCE PROCESS
Compliance is becoming more complex. Our survey, conducted in late 2015, reveals just how much more complex it is becoming, and the impact this increased complexity is having on compliance professionals. The picture that emerges is one of a business function under significant pressure. Sixty-nine percent of all respondents said they felt that their business was more exposed to risk than it was two years ago and 78 percent agreed that the sheer complexity of compliance represented a risk in itself.
Fear of scandal, increased regulation and increased scrutiny were all highlighted as material concerns helping to drive this change. Indeed, protecting the company’s reputation was identified by 59 percent of respondents as compliance’s primary role. What lies behind these drivers is a fundamental shift in government policy which started in the US approximately 15 years ago.
The state of corporate governance
In the US, and subsequently in other national governments, there was recognition that they had the desire but not the competence nor the resources to effectively regulate financial markets, or to impose penalties on those that break the rules. As a result, in order to implement substantive change, this obligation was transferred to corporations themselves. Anti-money laundering and terrorist financing legislation, anti-bribery and corruption controls, prohibitions on the transfer of technology and the Modern Slavery Act are all examples of this.
Apr-Jun 2016 Issue
The Risk Advisory Group