2014 Corporate Compliance Officer Resilience Report

Transcription

1 Spring 2014 U.S. Corporate Compliance & Ethics Data Survey Facts & Analysis 2014 Consero Group LLC

2 INTRODUCTION Spring 2014 U.S. Corporate Compliance & Ethics Data Survey The responsibility of Chief Compliance Officers grows each year, as large businesses expand their reach in the global marketplace. Heads of Compliance are responsible for ensuring their teams are properly trained to identify and handle compliance risks, and they must make certain that the third-party suppliers with which their companies work are sufficiently focused on minimizing and managing risks on their end. Moreover, they are asked to do all of this in world with a variety of unique rules and regulations that remain constantly in flux. Fortunately, today s Compliance executives seem to be up to the challenge. Survey Structure And Methodology This survey was developed in connection with an invitation-only event hosted by Consero Group in April 2014 for Compliance executives from Fortune 1000 companies. While the survey was limited to 63 participants, the answers provide valuable insight into the perspective and concerns of this group of senior corporate executives Consero Group LLC. Reproduction Prohibited.

3 BUDGET & RESOURCES A Majority Of Chief Compliance Officers (75%) Have Sufficient Access To Resources To Manage Their Departments Effectively. In a tough economic climate, having sufficient resources is among the biggest challenges for any corporate function. Fortunately, it appears that today s large companies recognize the importance of a strong compliance department and are providing adequate resources for CCOs to carry out their responsibilities. A total of 75% of survey respondents expressed having sufficient access to resources to manage their department effectively. This is a positive change from the survey responses to Consero s Fall 2013 compliance survey, in which only 56% of CCOs felt the same way. Sixty percent of respondents reported that their departmental budgets have increased over the last 12 months, and 78% also noted that they have sufficient access to their CEO, further illustrating the support many CCOs currently seem to receive from their companies. Figure 1: How Has Your Departmental Budget Changed Over The Last 12 Months? 60% 15% 25% Increased Decreased No Change Figure 2: Do You Have Sufficient Access To Resources To Manage Your Department Effectively? Figure 3: Do You Have Sufficient Access To Your CEO? 75% 25% 78% 22% Yes No Yes No Consero Group LLC. Reproduction Prohibited.

4 COMPLIANCE TRAINING STRATEGY A Majority (67%) Of Survey Participants See Measurable Improvement From Compliance Training. At any company that takes compliance seriously, employees must be adequately trained to understand regulations, as well have the ability to navigate basic compliance-related situations that may arise. A total of 67% of CCOs have found that their compliance training programs have provided noticeable value to the employees of their companies. However, until this figure is 100%, there remains room for Compliance executives to improve compliance and ethics training. There are several different training methods used by compliance departments today. Companies sometimes use third-party trainers to train employees; however, the majority of those surveyed (87%) use in-house trainers to carry out their programs. In addition, 76% of respondents reported that they use a combination of online and face-to-face compliance education, indicating that exclusively in-person training is quickly becoming a thing of the past, but that online-only training programs are not enough. Figure 4: Has Your Compliance-Training Program Provided Measurable Improvement? Yes 67% No 33% Figure 5: How Is Your Training Program Primarily Delivered To Employees? Mixed 76% Face-To-Face 3% Online 21% Figure 6: Is Your Training Program Conducted By In-House Trainers Or By Third-Party Trainers? In-House Trainers 87% Third-Party Trainers 13% Consero Group LLC. Reproduction Prohibited.

5 COMPLIANCE PRIORITIES Regulatory Risk And Ethics Training Are The Top Priorities For Survey Participants In There are many areas of risk on which CCOs must focus. The top area of risk for 24% of the survey respondents is bribery and corruption, closely followed by money laundering. Very few respondents flagged the protection of intellectual property as an area of risk, possibly indicating that IP-related concerns are simply the responsibility of others at the company. A total of 63% of respondents believe that their middle management promotes a strong culture of compliance, which is important to controlling these areas of risk. At the top of the survey respondents list of priorities for 2014 are regulatory risk and ethics training. This is easy to understand, given that compliance departments face great difficulty in a global economy with ever-changing laws and regulations. Moreover, ethics training can help manage regulatory risk, and CCOs are keenly aware of the value of and need for more comprehensive training programs. In addition, the passage of the Affordable Care Act has raised some new compliance questions for companies, and a total of 43% reported that the ACA poses significant concerns for them. Whistle-blowing systems remain an important element of a company s compliance program. Interestingly, a total of 74% of respondents indicated that their whistle-blowing systems are handled by a third party, which seems likely to ensure that matters flagged by whistle blowers will be handled without bias and avoid being trivialized. Figure 7: What Is Currently The Top Area Of Risk At Your Company? 23% Money Laundering 16% Fraud 23% 16% 13% 13% Litigation 24% Bribery/Corruption 5% Intellectual Property 24% 5% 19% 19% Other Consero Group LLC. Reproduction Prohibited.

6 COMPLIANCE PRIORITIES Figure 8: What Are Your Top Priorities For 2014 (Select All That Apply)? 15% 18% 8% 31% 23% Ethics Training 15% Talent Development 18% FCPA Risk 8% Investigations 23% 31% Regulatory Risk 6% Other 6% Figure 9: Does The Affordable Care Act Pose Significant Compliance Concerns For Your Yes 43% Company? No 57% In House Figure 10: Are Your 26% Whistle-Blowing Systems Being Handled In House Or Via Third Party? Third 74% Party Figure 11: Does Your Middle Management Sufficiently Promote A Strong Culture Of Compliance? Yes 63% No 37% Consero Group LLC. Reproduction Prohibited.

7 THIRD-PARTY MANAGEMENT A Total Of 52% Of Compliance Officers Think Company Suppliers Are Not Sufficiently Focused On Minimizing Risk. In a global economy, the use of third-party suppliers is unavoidable. Managing corporate compliance in a way that includes the behavior of outside providers is an extremely difficult challenge particularly when those providers operate in foreign countries. Fortunately, the majority of respondents believe that their third-party suppliers provide sufficient value; however, there is clearly room for a more proactive universe of suppliers, as 41% of CCOs are dissatisfied with the value provided by their third-party suppliers. A narrow majority of 52% of respondents reported that their suppliers are sufficiently focused on minimizing risk. Relying on third-party suppliers creates exposure for a business, and it can be both frustrating and unsettling when suppliers are not concerned with mitigating risk. Unfortunately, CCOs seem to have few easy solutions to this problem. Figure 12: Have You Increased Or Decreased The Number Of Suppliers To Your Department Over The Last 12 Months? 40% Increased 12% Decreased 48% No Change Figure 13: Do You Feel You Are Receiving Sufficient Value From Your Third-Party Suppliers? Figure 14: Are Your Company s Suppliers Sufficiently Focused On Minimizing Risk? No 41% Yes 59% No 52% Yes 48% Consero Group LLC. Reproduction Prohibited.

8 CONCLUSION Lessons For The Industry The responsibilities of CCOs seem to be expanding constantly, and this is certainly the case in Fortunately, companies generally seem to recognize the importance of corporate compliance and are providing compliance departments with substantial access to senior leadership, as well as enough resources for them to manage compliance issues effectively. Ethics training is an important concern for many CCOs, and while it is clear that current training programs are improving compliance and ethics comprehension, there is still some ground to cover. In the next few years, we may see more in-depth training programs, in order to provide deeper understanding of compliance issues and to mitigate as much risk as possible. Minimizing supplier risk continues to be a major issue for most CCOs, and many do not believe third-party suppliers contribute enough value. It will be interesting to watch the development of relationships between suppliers and CCOs, and to see if there is improvement of third-party provider appreciation and management of risk over time Consero Group LLC. Reproduction Prohibited.

9 How Is Consero Different From Other Conference Companies? Branded as the anti-conference company 1, Consero s model is a vast improvement over the traditional model for conferences and trade shows in several important ways. Exclusivity, Intimacy, and Commonality. Consero puts its executives first. Unlike other conferences, a Consero Forum brings together executives with common levels of experience and seniority, as well as similar business challenges. This ensures optimal networking and collaborate development of best business practices. Original Content and Thought Leadership. Consero views its events as a means to an end solving business problems. Consero prides itself on generating exceptional, original content that contributes to practical discourse, yielding impactful takeaways that help participants to improve their own performance, as well as that of their departments and organizations. By permitting its programs to evolve until the Forum takes place, Consero can integrate the most current significant developments e.g., a late-breaking Supreme Court decision impacting antitrust law into the solutions that emerge from the Forum. This focus on world-class content is an important differentiator for Consero. What Problems Does Consero Solve? Today s senior executives are busier than ever and inundated with information, too little of which addresses their specific current needs. Consero brings together those senior executives so that they can learn from one another in an efficient, exclusive format, and build relationships that facilitate ongoing post-forum dialogue. One of the primary components of a Consero Forum s substantive program is its KnowledgeBridges, 10- to 15-person roundtable discussions on specific topics of interest that relate to common business challenges. During these highly interactive discussions, each moderated by an industry expert, executives share ideas and address particularly difficult problems with their counterparts in the room. There is no substitute for this kind of professional learning. In addition to superior educational opportunities, Consero Forums expose senior executives to participant-requested and Consero-vetted industry solution providers that offer innovative enterprise solutions to business issues identified by the executives themselves. Consero s highly selective criteria for solution providers and insistence that those companies send their own executives (not salespeople) ensures that Consero executives are constantly educating themselves about world-class solutions that can improve their business. 1 Gonsalves, Antone. Consero Takes Aim at Bored C-Suiters with Its Anti-Conferences. Bloomberg. Jan. 28, < Jan. 28, Consero Group LLC. Reproduction Prohibited.

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