“State of Compliance: 2012” Study Provides a Lens into the Changing Practice of Compliance Risk Management

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An article by Suzanne Dawson and Matt Kelly posted on the pwc.com website.

This article discusses the Compliance Week Conference held in Washington D.C., and the survey results from the State of Compliance 2012 Survey.  The article also provides links to more information, and a link to survey questions that you can answer.

The article states, "According to initial results of the report, the compliance department is involved to some degree in evaluating or overseeing virtually every risk or regulatory issue, including anti-trust, anti-corruption, ethics, import-export, supply chain, social media, and codes of conduct. PwC and Compliance Week found, however, that several challenges remain before compliance officers can move toward a fully integrated, proactive function. These challenges include fragmented IT systems, tight budgets, shifting and growing regulatory requirements, and the ongoing challenge of proving that the compliance program is effective.

“Few elements of corporate compliance are as elusive as the art of confirming that your ethics and compliance program is effective. Compliance officers today know that just tracking calls to the hotline isn’t enough. The question is what is enough,” said Bobby Kipp, partner in PwC’s Assurance practice. “Compliance officers really need overall assurance that their program is effective. Getting that assurance requires a combination of multiple metrics and insights.”

According to the Study, compliance officers still have much work ahead of them to harness existing IT systems and to build new ones that will provide a more holistic view of risk and compliance."

The article further states, "Other preliminary key findings from PwC and Compliance Week include:

• Most companies now have a compliance committee (71 percent, up from 57 percent last year)
• While 78 percent of respondents anticipate increased board and audit committee demands for evidence of effective compliance; only 35 percent are currently “very satisfied” with the assessment of the effectiveness of their compliance programs
• Budgets are moving in positive directions – 21 percent of respondents are reporting budgets of $3 million to $10 million (up from 14 percent in 2011)
• Staffing levels are increasing – nearly 80 percent of respondents said their compliance departments grew at least modestly in the last year
• Reporting relationships are moving in the right direction – more compliance officers (32 percent) formally report to the board; however, reporting to the general counsel (GC) is also still quite prevalent (33 percent of respondents report formally to the GC)"