11 September Compliance on everyone s agenda

Transcription

1 11 September 2014 Compliance on everyone s agenda

2 .what is the consequence of non-compliance? 2

3 Why compliance is high on the agenda? Reputational risk cited as the #1 risk today in Deloitte/Forbes strategic risk survey amongst more than 300 top executives in global companies. Why? Global regulatory environment: Regulatory guidance on board responsibility (US/UK) Increase in regulation and enforcement actions Size of fines and sentences Global co-ordination between regulators / cross-border enforcement Growing public demand for corporate transparency Business environment Increased complexity of business Rapid changes in business models driven by for instance: Digital risks including cyber threats Social media Mobile technologies Geographical reach, new cultures, new risks Bribery and corruption continues to be high on the list Heightened attention to environmental and social issues 3

4 Shareholder value Compliance maturity in Denmark A fragmented but evolving picture Overview of risk management maturity in selected Danish companies FMCG Chemical Manufacturing Manufacturing Consumer Business Financial Institutions B2B wholesaler Shipping Health Care and Service Life Science SW Manufacturing Med tech company Manufacturing Risk intelligent Initial Fragmented Top-down Integrated Stages of risk management maturity Some observations Growing recognition of compliance issues i.e. bribery, antitrust, cyber security etc. The scope of compliance efforts are widening Significant upgrade of risk control/mitigation 3 lines of defense approach becoming practise Integration of (compliance) risk into key processes (strategy, projects etc.) A growing interest in standardizing and creating a more efficient compliance effort Considered a success factor for harmonising and optimising key processes Still the approach in many instances is fragmented and silo-oriented Slowly moving towards more integrated compliance solutions Often a huge cultural shift to implement an effective compliance strategy 4

5 Role of the board setting the tone at the top Compliance is non-negotiable, but it is critical that boards and management establish a culture of integrity and strong ethics + Ethics Moral Attitude Role model Appearance Ethics Moral Attitude Role model Appearance 5

6 Where are the Danish Boards on compliance? Board of directors Overall a fragmented picture Understands the concept of tone-at-the-top Recognizes the importance of compliance Asks more questions related to compliance Yet struggle to get a meaningful and aggregated view of compliance risks and how they are managed Audit Committees Will often be responsible for compliance oversight Periodic overview of relevant compliance areas Deep dives into key compliance areas on a rotational basis Key considerations for the Board Do we know what requirements to comply with? Are we complying? Are we complying in a cost effective manner? Issue Often it is difficult to get a clear answer to these questions 6

7 What are the core elements of effective compliance? An integrated and effective compliance model should consider: the impact from the environment how to ensure execution an adequate evaluation procedure 7

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