Survey: Corporate counsel say regulatory climate is hurting business.
Regulations and policies are overwhelming becoming a barrier for businesses, and impeding growth, according to the sentiment of general counsel. The new report that was released this week was conducted by Grant Thornton LLP and Corporate Counsel magazine, which for the third consecutive year, surveyed corporate counsel to get their views on the key threats to business development.
The survey shows a majority of corporate counsels perceive the current regulatory environment as bad for business. The report also found that more than two-thirds (69 percent) of respondents say that the current regulatory environment make it harder to do business, while almost two in five (39 percent) believe the current regulatory environment has diverted resources from the company's core competencies. Twenty-nine percent and 21 percent, respectively, indicate that the current regulatory environment decreased profits or impeded growth.
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Other key highlights from the 2015 Corporate General Counsel Survey include:
An overwhelming 58 percent of in-house counsel surveyed believe their organizations are somewhat prepared to effectively respond to data breaches;
Corporate counsel cite more than 10 different titles as having primary responsibility for responding to data breaches, including chief information officer, chief security officer, general counsel, chief compliance officer, chief financial officer and chief risk officer, among others; and
While 91 percent of companies made changes to the way they manage their risk, 45 percent of survey respondents indicate that they are not sure that their approaches are effectively reducing corruption and bribery risk.
"The sentiment of the corporate counsel surveyed is consistent with many corporate officers," said Brad Preber, national managing partner of Grant Thornton's Forensic and Valuation Services practice. "On the whole, companies have not yet found the right balance between regulatory compliance, growth and profitability."
With the current regulatory climate, companies are taking new steps to mitigate their regulatory risk. The most frequent changes are strengthening policies and procedures (70 percent) and increasing education and training (60 percent). Forty-one percent are also engaging outside advisers/consultants and 36 percent are adding internal compliance personnel. Only 28 percent of in-house counsel have implemented software tools, while just 21 percent have utilized data analytics.
Despite the fact that corruption and bribery risk remain at record high levels, few businesses have increased resources devoted to managing them. One possible explanation is the explosion in concern over cyber security. While only 21 percent of corporate counsel say their businesses have increased the time and resources devoted to managing corruption and bribery risk, an overwhelming 69 percent have increased the time and resources devoted to managing cyber security and data privacy risk since last year.
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|Date:||May 22, 2015|
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