Posted by Amanda Haskew on Thursday, January 15, 2015 - 14:00
According to the report, produced annually by Robert Half and the Financial Executives Research Foundation (FERF), an overwhelming majority of executives — 99 percent in the U.S. and 96 percent in Canada — believe their or remain steady over time.
Why and how is the burden of regulatory compliance growing, and how can you make sure your company is prepared to meet these demands?
Fallout from the global financial crisis
The roots of increased compliance burdens can be found in the global financial crisis. The crisis left behind a stricter regulatory environment and the development of new regulations that affect myriad industries. This resulted in companies — local and global, large and small — falling under pressure to understand and comply with a dynamic set of regulations.
Sources of regulation
Demands vary depending on the type and size of each individual company, but one thing remains certain: Organizations are now facing compliance challenges from multiple sources, including:
Dodd-Frank Act Wall Street Reform and Consumer Protection Act
Financial Accounting Standards Board (FASB)
Sarbanes-Oxley Act (SOX)
Affordable Care Act (ACA)
Global companies face even higher demands as they must meet the compliance mandates of all the nations they do business with or in. Therefore, they routinely have to stay abreast of complex regulatory standards such as JSOX (a Japanese set of regulations comparable to SOX), as well as anti-money laundering, anti-corruption and bribery laws.
The need to streamline
Aside from indicating belief that compliance demands will continue to increase, survey data reflects an overwhelming call for agencies to streamline regulations. As in 2013, the majority of financial executives seek simplification. Some 76 percent of U.S. executives and 75 percent of Canadian executives responded that streamlining regulations would ease the compliance demands their companies face. Unfortunately, the pendulum is swinging in the other direction.
The most notable impact of compliance is . It requires companies to spend money educating in-house staff or hiring to navigate the changing landscape. Among U.S. executives, 48 percent noted an increase, while 51 percent reported that compliance costs were holding firm. In Canada, 55 percent of executives reported steady costs, with 41 percent saying costs had risen.
Additionally, meeting compliance demands necessitates additional time from staff members who may already be stretched thin. Both U.S. and Canadian executives expect to see their compliance burdens drastically increase by 74 percent and 67 percent, respectively.
If your company is negotiating the complex world of regulatory compliance, prepare yourself by identifying your primary compliance risks and evaluating your need for staff training or additional hiring.