Compliance
Survey
Global Compliance Survey
Executive Summary
Companies and organizations are under an ever-intensifying burden to manage and comply with count-less and complex global rules and regulations. Meeting this challenge is essential to maintaining the enterprise and reputational value of an organization but is especially difficult as companies continue to expand operations in multiple jurisdictions.
With the goal of providing the corporate legal community with a set of benchmarks against which they can evaluate the effectiveness of their own programs, Squire Sanders and Datacert have collaborated on a Global Compliance Survey. In summer 2011, the survey was conducted with corporate legal departments around the world representing a broad mix of industry segments. Those responding consistently hold senior level positions (titles include General Counsel, Chief Legal Officer, Associate General Counsel, Chief Compliance Officer) in large legal departments with more than two-thirds of the organizations having a dedicated compliance resource.
The key findings of the study include:
• Virtually all of the companies represented do business in more than one country, and report that the majority of their compliance needs originate outside their headquarters country.
• Participants expect both their domestic and global compliance challenges to rise. New areas of corpo-rate activity are becoming subject to regulation, existing regulations are becoming more complex and geographically diverse, and more countries are enacting heavy business regulations.
• No one area of compliance stands out among the others in its level of challenge, suggesting that com-pliance professionals must spread their attention across many fronts. Having a process for centrally tracking all compliance-related information emerges as both a critical success factor and an area need-ing improvement. More than half (nearly 55%) have a central trackneed-ing process in place, and they are the most satisfied with their compliance programs (none of the respondents who are not happy with their program are centrally tracking compliance information). Almost one-third (32%), however, expressed some dissatisfaction with their existing system for tracking compliance metrics and trends.
While companies have no choice in addressing the new regulatory environment to minimize risk, success-ful global compliance programs can provide a competitive edge, resulting in greater market share and enhanced profitability. At a time of increasing regulatory complexity, learning to successfully navigate this ever-changing landscape will be a key differentiator among companies.
88 Participants
Average Revenue = $11.75 Billion Industry Segments Energy/Chemicals Retail/Consumer Goods Financial Services Manufacturing Technology Other Real Estate/Construction Telecommunications Healthcare/Medical Equipment Pharmaceutical 15% 14% 12% 12% 12% 10% 8% 8% 7% 2%
Participant Demographics
Where does your company conduct business? (Select all that apply)
Total selected: 510
Does your organization have a dedicated compliance officer or resource?
Total responses: 73 Yes No 72.6% 0% 20% 40% 60% 80% 100% 27.4% North America: 11:57% (United States only: 3.73%) Western Europe: 9.80% Eastern Europe: 9.41% Southeast Asia: 9.41% South America: 9:22% China: 9.02% Central America: 8.24% Australia: 7.84% Middle East: 7.65% Russia: 7.25% Africa: 6.86%
Respondents overwhelmingly expect both domestic and global compliance challenges to increase in the coming year.
What percentage of your compliance needs emanate from outside your primary HQ country?
Total responses: 73 Under 10% 10-25% 25-50%: 50-75%: 75-90%: Over 90% 20.55% 0% 10% 20% 30% 40% 50% 16.44% 19.18% 27.40% 10.96% 5.48% 2.78% In 2011-2012, do you expect your
in-country/domestic compliance challenges to:
Decline
Stay the same
Increase
Total responses: 72
0%
In 2011-2012, do you expect your global/multi-jurisdictional compliance challenges to:
78.38% 21.62%
Decline Stay the same
Increase
Total responses: 74
Global Compliance Survey
65.28% 31.94%
On top of the need to institute global compliance programs, each specific area of compliance rates nearly equal in importance to the others. This means that compliance professionals must remain vigilant on many fronts. This explains why many companies turn to outside providers for certain aspects of their compliance programs.
Rate the challenge posed by these compliance areas. (5 being most challenging, 1 being least)
Anticorruption: Fraud: Competition and Antitrust: Safety regulations: Financial regulations: Environmental regulations:
3.57
0 1 2 3 4 5
Least challenging Most challenging
3.41 3.40 2.74 2.71 2.94
What resources do you currently receive from outside providers for compliance issues? (Select all that apply)
Total selected: 147 Computer-based training Incident tracking software
Matter management In-person training None Software 13.61% 0% 10% 20% 30% 40% 36.05% 19.05% 14.97% 7.48% 8.84%
A critical part of a successful compliance program is a process for centrally tracking all information related to compliance. Respondents who do so are significantly more satisfied with their compliance programs overall.
Do you centrally track all information related to compliance (e.g. training, incident reports, hotline calls, filing requirements, etc.)?
12.33%
54.79% 32.88%
No, it is not possible
No, but I would like to
Yes
Total responses: 73
Are you happy with your current solution or process for tracking compliance metrics and trends? 51.35% 18.92% 16.22% 13.51% No Very Barely Somewhat Total responses: 74
Overall, there is significant room for improvement in compliance programs. The results of this survey offer insights into what tools used in compliance programs lead to the highest rates of satisfaction.
Are you happy with your current compliance program? 48.65% 28.38% 17.57% 5.41% No Barely Very Somewhat Total responses: 74
In March 2011 Squire Sanders held a roundtable for general counsel in the chemical industry. The event brought together more than 30 general counsels and other executives from across the chemical industry to discuss topics in the areas of trade, compliance, doing business internationally, regulatory updates and other important legal issues. In conjunction with this event, participants were surveyed about how they structure the compliance function for their organizations.
Global Compliance Survey: Chemical Industry Focus
To whom does the CCO report?
General Counsel Chief Executive Officer Audit or Other Board Committee 25.0%
25.0% 50.0%
Total responses: 16
How long has your company had a Chief Compliance Officer (CCO) in name or function?
37.5% 18.8% 6.3% 12.5% 25.0% Total responses: 16
More than 10 years 6-10 years 1-5 years Less than 1 year We don’t
How many dedicated employees, including the CCO, work in the central corporate compliance function?
101-200 26-100 11-25 Total responses: 14 6-10 3-5 2 1 7.1% 7.1% 21.4% 14.3% 14.3% 14.3% 21.4% 28.6% 35.7% 14.3% 21.4%
How would you describe the structure of your organization’s compliance function?
Centralized (a global leader/function, with or without centralized staff) Federated (a global
leader/function and compliance executives/liaisons in the businesses)
Decentralized (no global leader/function but compliance executives/liaisons in the businesses)
Hybrid Total responses: 14
Does the CCO delegate the management of day-to-day operation of the compliance function to another individual?
38.5% 61.5%
Total responses: 13
If yes, how does the person who is in charge of day-to-day management of compliance interact with the Board of Directors?
Reports independently to either the Board or relevant committee Reports with the CCO to the Board or relevant Committee Does not have direct access to the Board 41.7% 50.0% Total responses: 14 Yes No 8.3%
What other titles or functions does the CCO hold? CCO only General Counsel Associate or Deputy General Counsel Chief Executive Officer 14.3%
21.4% 21.4%
42.9%
Global Compliance Survey: Chemical Industry Focus
71.4% 21.4%
7.1%
How often does your CCO meet with the Board or the appropriate Board Committee?
Total responses: 14 Monthly Ad hoc (whenever necessary) Quarterly 7.1% 35.7% 21.4% 21.4% 14.3%
How often does your CCO meet with the CEO and/or appropriate senior executive team on compliance matters? Total responses: 14 Weekly Monthly Quarterly Annually Ad hoc