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Compliance: Challenges Increase but Budgets are Often Underfunded
Corporate ethics and compliance continue to be under close scrutiny across all businesses. Compliance is particularly important to businesses that operate in many different geographies and need to comply with different local and regional regulations and rules.
Keeping tabs on the many different forms of social media and communication is just one area that has become a major challenge in the world of compliance. Stephen Marsh, CEO and founder of Smarsh, said that “compliance officers are adjusting to new regulatory guidance around the oversight of electronic communications amid a growing list of communication channels – LinkedIn, Twitter, and instant messaging, for instance – that firms may not have used just a few years ago. Regulatory agencies have made it clear that the oversight of electronic messaging is a key compliance priority, and firms’ surveillance policies and procedures will come under more scrutiny than ever.”
Despite the challenges, compliance groups within organizations are often go underfunded. A 2014 Compliance Trends survey found that among businesses with more than 7000 employees as many as 40 percent spend less than $1 million on compliance.
Thomas Rollauer, executive director, Center for Regulatory Strategies, Deloitte & Touche LLP, said that “compliance is becoming more complex and reputational risks due to inadequate oversight carry greater consequences than ever before. But in many companies, the chief compliance officer still lacks the authority and influence to secure the necessary resources, budget and staffing, to effectively address today’s compliance challenges. A cultural shift is needed at the top, from leadership in the C-suite, to stop viewing compliance merely as a pure cost that does not drive top-line growth, and instead, as an investment in critical infrastructure that protects the value of the entire enterprise.”
