Going into the 2020s and beyond, a corporate compliance function needs to be an integral part of your corporate business strategy going forward. One of the key reasons is the ever-important debate of compliance as a cost center will become more critical going forward in this decade. Obviously if compliance programs are not effective, enforcement actions will continue to be extremely costly. Over last 10 years, there has been an increasing impact on the business where you not only must have compliance resources focused on remediation, but business resources as well. This has only grown greater with reputational risks amplified by social media.
This is because as significant (and costly) as these regulatory fines and penalties have been, it is the intangible reputational damage which, in the long run, may be even more costly. With multiple stakeholders who might not desire to play out on the risk curve that might be higher risk or located in higher jurisdictions or operating in higher risk industries. Further, there are other consequential impacts if compliance does not have a seat at the table. If compliance has a seat at the table, there can be some leeway for compliance officers and for firms to figure out how best to roll out a compliance program that is commensurate with the organization’s risk and compliant with the regulations. If compliance is relegated to the back of the (corporate) bus there will be little chance to do so.
Three key takeaways:
- It will be even more important for compliance to have a seat at the table going forward.
- Look for synergies with other types of compliance.
- Such synergies can be a big cost savings.