Companies Facing Increased Demands in Their Compliance Programs

Companies Facing Increased Demands in Their Compliance Programs

In the State of Compliance 2019 report, survey respondents overwhelmingly said they are spending increased amounts of time on compliance.

In the report, presented by Assent Compliance, Compliance & Risks, PTC and Ropes & Gray LLP, and authored by  independent researcher and strategy consultant Natalie Picot, respondents were asked to gauge how much more time their companies are spending on compliance-related efforts in comparison to three years ago. Ninety-one percent of survey respondents reported their teams are spending more time on compliance efforts. On average, companies are spending 16 to 25 percent more time on compliance-related activities, which is consistent with findings from the 2018 report.

But why are companies experiencing such an increase?

Product compliance, corporate social responsibility and vendor management requirements are growing and changing every year, and companies need to collect, manage and validate more data than ever.

Factors that contribute to this demand include:

  • Expectations surrounding transparency. With increased supply chain transparency gained through regulatory compliance programs comes the need to identify risks and associated mitigative activities.
  • Globalization. As companies broaden their global supply chains, the associated risks increase. This also holds true for companies selling into global markets, which results in an increase in the number of regulations they are in scope of. Increasingly, companies are reviewing compliance obligations as a part of market access strategy discussions, as a precursor to product design, sourcing and product launch.
  • External stakeholder pressure. Both investors and consumers are driving expectations for companies to demonstrate strong compliance and corporate social responsibility practices that go above and beyond what is legally mandated. These additional demands require an increase in effort toward due diligence activities and reporting.

Companies indicated they plan to adapt their programs to manage this demand by choosing to:

  1. Redirect staff toward compliance (33 percent).
  2. Hire additional staff (32 percent).
  3. Expand efforts with an existing third-party solution (31 percent).
  4. Leverage consultants and other outsourced providers (30 percent).

This spread indicates that there may be a lack of clarity surrounding best practices for managing compliance. While teams that have embraced technology report the highest program satisfaction, the response to increased demand is still inconsistent and varied.

You can download the State of Compliance 2019 report now to learn more about compliance team structures, costs and growth strategies, and benchmark your program against your peers. You can also register for the State of Compliance 2019 webinar, which will be held on May 30 at 2 PM, as Assent’s Vice President, Compliance & Regulatory Programs,  James Calder joins Ropes & Gray’s Michael Littenberg to discuss the results in depth.

To learn more about Assent’s supply chain data management solution, email info@assentcompliance.com.

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