Rapid changes in the global marketplace mean that organisations across all sectors - financial, healthcare, utilities, automotive, manufacturing, transport - face increasing complexity in the regulatory environment.
Changing regulatory landscape
New compliance rules and regulations are evolving quickly and with disparity across regions. Organisations are having a difficult time keeping up with the changes as they must increasingly consider new areas of regulatory requirement such as sustainability transparency reporting as well as mature but updating compliance requirements such as health and safety. These challenges include the ability to manage compliance against an exhaustive set of legal regulatory obligations, the ability to distribute updated policies, and the necessity of managing actions that ensure people are on task to complete regulatory procedures across their business units and departments.
A recent BDO survey of corporate directors at public company boards found that 69% identified regulation/compliance overload as the single greatest risk to the business. This number eclipsed the percentage of directors who felt that fraud and corruption, or cyber and privacy breaches represented their greatest risk-management challenges
It’s not just regulators and the board members concerned about compliance, though.
In light of the global financial crisis and climate change and a number of high-profile failures, investors and the general public have joined legislators in taking an increasingly active interest in corporate transparency and regulatory compliance performance. It’s fuelled all the more by the immediacy of information due to social media breaking down the corporate walls.
Preparing for major change
This year sees a significant change in the mandatory reporting requirements of potentially 12,000+ companies within the member states of the European Union. Alongside their annual financial report, they will now be required to provide transparency on how they manage and mitigate risk within so-called ‘non-financial’ matters like environmental, social, anti-bribery & corruption and diversity. Previously, the inclusion of this information was voluntary and while the majority of companies acquiesced, it was not as prescriptively monitored as it will be in the light of the new legislation. But the key emphases are on comprehensive data collection and careful reporting requirements of the sweeping changes it entails - a challenge faced by CEOs and compliance officers in many industries that face new environmental regulations, increased industrial safety demands and other compliance issues.
Operating in a rapidly changing global environment - Managing legal & regulatory compliance