...That’s one of the suggestions from a new report.
International Business Attitudes to Compliance 2017 is published by risk consultants Control Risks, and looks at the way firms are approaching governance.One of the key findings is that compliance often plays a small role in companies’ board meetings.
Only 27% of respondents reported that their company’s Chief Compliance Officer or equivalent attends all board meetings. In another 35% of companies, he or she attends some of them.
So – should Compliance be better represented on boards?
This is something we have explored before in our blog on why you need a Compliance expert on your board.
Why compliance is a board issue
Companies are struggling to devote sufficient resource to governance issues.
The report shows that 26% of companies with more than 10,000 employees devote less than $25 per person, per year, to compliance. And 28% of large companies have teams of just one to five people.
The report states that while ‘there is no standard benchmark to show that a specific size or budget is “enough”… these figures look far too small.’
Almost half of the companies surveyed (46%) have compliance budgets of less than $250,000 a year, with another 23% having budgets of $250,000 to $1m. Only 10% have budgets of more than $10m.
The report says that, ‘These figures seem particularly low, given that the cost of a major investigation can easily run into the hundreds of thousands, or even millions of dollars’.
Faced with these constraints, getting governance matters onto the radar of board members seems more crucial than ever.
Getting compliance onto the board agenda
Limited resources – both human and financial – make laser-light focus vital. Your directors need to prioritise where time and money are spent.
With a recent report claiming that good governance is more important than ever to your corporate reputation, it should be near the top of every board agenda, with priorities set regularly.
As the report says, ‘Compliance needs to be a visible part of strategic decision-making if it is to work effectively with the other business units’.
Having your CCO or equivalent on the board can be the driving force behind this increased focus on governance matters.
As well as getting governance issues to the top of the agenda, it can help you to build a corporate culture where ethical behaviours are adopted top-down.
Download our whitepaper on How to embed a compliance culture into your businessto read more on how you can achieve this. The whitepaper is free and you can download a copy here.