PwC's State of Compliance 2013 Survey Reveals Growing Importance of Compliance Role in a Transnational Business Environment

NEW YORK, June 26, 2013 /PRNewswire/ -- PwC US today released its third annual State of Compliance 2013 Survey.  This year, PwC expanded the scope of the survey to include U.K.-based companies.  With nearly 800 responses from compliance executives, the survey focused on three key areas: governance & resources, managing risk & program effectiveness, and technology & social media.

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More than ever, chief compliance officers (CCOs) are looking to help their organizations set a path for effective compliance that works in conjunction with their organizations' strategic goals and supports business resilience. However, CCOs are under pressure as demand for greater evidence of program effectiveness continues to increase, especially from regulators (according to 57 percent of respondents) and audit committees (54 percent).  The top three risks identified this year are data privacy, bribery/corruption and industry specific risks (32 percent, 30 percent and 29 percent respectively).

"Managing compliance is not just a functional necessity -- it's a critical component needed to successfully navigate the turbulent global environment and deliver against the business strategy -- especially in the wake of high profile cases and recent events around the world," said Bobby Kipp, partner, PwC.  "Increasingly, CCOs are under intense scrutiny to provide value for money spent, and proving return on investment (ROI) continues to be difficult."

Companies in both highly regulated and "less regulated" industry sectors have established formal compliance infrastructures.  Eighty percent of survey respondents have CCOs, and over two thirds have had CCOs for over five years.  Compliance committees have also become commonplace (almost 60 percent of respondents) but the roles of these committees vary.  While a large portion of CCOs report to Legal/General Counsel (28 percent for U.S.-based companies; 16 percent for U.K.-based companies), more and more CCOs report to CEOs (28 percent; 24 percent), or the Board (20 percent; 34 percent).

"Where the CCO resides in an organization influences compliance governance and the company's mind-set about compliance and signals organizational commitment," said Sally Bernstein principal, PwC.  "Reporting directly to the CEO can raise the profile of the role significantly and can send a powerful message to the organization.  The structure of compliance committees also contributes to governance and ultimately effectiveness of the function.  Compliance committees that are comprised solely of individuals from traditional internal functions, versus business operations, may not be optimally equipped to fully understand and address the range of compliance risks that a company might encounter."

Social media is also gradually becoming more valuable for corporate compliance program management, with usage rising to almost a third of responders. U.K.-based companies are more likely to use it proactively to communicate to the external community about ethics and compliance (64 percent) than their U.S. counterparts (41 percent); whereas U.S. companies are more inclined to utilize social media as a passive tool in their compliance toolbox.

"While the general population is using social media effectively on a day-to-day basis, businesses have not yet caught up.  Most are focused on the risks versus actual benefits of using social media as a communication medium," added PwC's Bernstein.

PwC's findings revealed an interesting discrepancy between what respondents shared anecdotally in the survey versus actual statistics.  While the survey statistics reflect that compliance function budgets and staffing are stable or increasing, respondents most frequently commented that they need additional resources and technology.

"While it's certainly good news that despite the challenging economic environment, compliance budgets are generally not decreasing, CCOs are feeling the pressure of the ever-increasing complexity and scope of compliance," said PwC's Kipp. "They need the right resources to help ensure adequate risk management."

On June 20^th, PwC and Compliance Week hosted a webcast to reveal the findings of the survey. To watch the replay, visit: video.webcasts.com/events/comp001/45895

For a copy of PwC's State of Compliance 2013 survey report, visit www.pwc.com/us/compliancebenchmark2013

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SOURCE PwC US