Large companies globally are not putting enough resources to comply with best business practices and exposing themselves to risk, says advisory firm Control Risks.
Large companies globally are not putting enough resources to comply with best business practices and exposing themselves to risk, says advisory firm Control Risks. On India, it said that compliance has become even more crucial and regulators like Sebi and CCI are stepping up enforcement efforts. The annual report of international business attitudes to legal and compliance risk noted that a quarter of large companies invest less than USD 25 per staff on compliance, annually.
Moreover, 28 per cent of large companies have compliance teams of five people or less, the survey of senior executives responsible for compliance at 1,000 companies worldwide said. “Companies are in danger of putting themselves at risk by failing to prioritise and integrate compliance within their businesses. Whilst the necessary investment will vary widely between organisations, many companies are woefully under- resourced to deal with the increasingly complex, constantly evolving and often contradictory regulatory environment,” Control Risks CEO Richard Fenning said.
The research noted that senior management need to be more receptive to compliance issues. Only 27 per cent of executives responsible for compliance attend all board meetings and just two-thirds of the respondents rely on whistle-blowing rather than taking the initiative to conduct anti-fraud and anti-corruption audits. Andrew Macintosh, Executive Director, Control Risks, South Asia Practice said, “compliance has never been more crucial for companies in India and it has never been tougher”.
Indian regulators – Securities and Exchange Board of India and the Competition Commission of India — are stepping up enforcement, he said adding as recent high-profile anti- bribery cases have shown, international companies in the region face detailed scrutiny from agencies such as the US Department of Justice and the UK Serious Fraud Office. In 2016, 30 companies were fined a total of USD 2.4 billion for non-compliance under the US Foreign Corrupt Practices Act (FCPA).