A new study from Deloitte has revealed that over 90% of businesses want to see a cultural shift in the way they comply with regulations. Over 60% of companies surveyed said that is an area that they plan to focus on in the next 12 months.

In recent years the UK has seen the introduction of enhanced regulations, such as the Bribery Act 2010, and a rapid rise in action being taken against firms under existing regulations like competition law. Global firms are also having to deal with different regulatory regimes in different territories. These factors and others have proceeded to push regulatory and ethical compliance right to the top of boardroom agendas. Encouragingly, the survey found that in nearly half (45%) of companies the compliance function reports directly to executive management. Such influence from the top level of management will be crucial in driving change and embedding a culture of ethical behaviour.

Tim Archer, partner in Deloitte’s enterprise risk services practice, said: “Overall the companies surveyed believed they are effective in complying with specific regulations, but they see the biggest challenge as creating an integrated approach to compliance. Such an approach is characterised by an organisation whose employees are driven to comply by values - “the right reasons” - rather than rules - “must do it” - and supported by frameworks that allow their organisations to ensure compliance whilst managing its cost. We believe the vision is possible and it is encouraging that we have seen compliance functions with the status to influence senior management. This high-level support will enable a top-down approach that will push the culture forward.”

Other highlights of the report:

•Compliance functions have only recently become a regular feature of many organisations. Indeed 95% of compliance functions surveyed were established after 2001 and 64% since 2009.

•86% of respondents stated increasing complexity of the regulatory environment or stricter enforcement of legislation were the main driver of changes and growth in compliance functions

•12% of respondents felt that their vulnerability to compliance risks had reduced in the past 12 months

•78% of respondents stated that their organisation had experienced at least one enforcement action in the last five years

•Nearly 40% of organisations surveyed predicted significant or major changes to their compliance organisation over the next 12 to 18 months

•Only 30% of organisations surveyed listed improving ethical compliance within their organisation as one of the current priorities. This suggests that the majority believe they are doing enough in this area already

•54% of respondents stated their compliance responsibility is spread across the business in the shape of divisions and business unit levels rather than seen as an exclusive head office responsibility

•57% of respondents are expecting the most significant increase in responsibility for compliance functions over the next 12 months to be around the development of “fit for purpose” compliance monitoring mechanisms

•Compliance audits are currently deployed by 55% of respondents

•27% of the organisations surveyed currently use risk and control electronic tools, highlighting potential gains for compliance functions by expanding their use of IT tools to support compliance monitoring activities

Share Story: