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Publication date: 18 April 2011
Is regulation suffocating global growth?
According to the Annual Global Accelus Survey by Thomson Reuters GRC, which polled more than two thousand senior governance professionals, compliance officers and legal counsel who manage risk everyday for their companies, today’s rigid regulatory environment may be stifling economic growth.
Key findings from the survey included:
- Almost three quarters (71%) of the world’s senior compliance and risk managers in the most heavily regulated industries say the global economy is now being held back by the sheer volume of regulation companies have to navigate on a daily basis.
- Two thirds (66%) believe keeping up with regulation is impeding many industries’ route to market – by holding up new products or slowing mergers and acquisitions.
- A significant number (88%) of respondents also say the organisations which regulate their industry need to find better ways to make sure the rules they want to enforce are effective.
Elsewhere, the survey results showed that sixty percent (60%) of those who responded say their company needed more staff to handle the volume of work and far more help from outside agencies to learn how to best create internal policy to meet the requirements of the regulator. Moreover, the issue is not confined to the financial services industry but to all heavily regulated industries including healthcare, energy, life sciences, shipping and legal.
“Whilst many recognise the need for new rules, our clients have growing concern over how they should deal with the avalanche of rules and regulation they face on a daily basis,” said David Craig, President of Thomson Reuters GRC. “Last year in the financial sector alone, we evaluated more than 12,500 regulatory updates globally that’s 50 per day and this number will be even greater in 2011.”
The Accelus Survey highlights a desperate need for companies across the globe to find more efficient and effective ways to deal with governance, risk and compliance. “Handling regulation is no longer a simple matter of one person sitting in an office within a business. Audit, risk and compliance professionals are faced with revolution in their roles. We live in a culture of ever changing business rules and dealing with it requires insight and new tools to react to those changes,” Craig said.
The survey also highlighted a worldwide call for more cooperation within companies and between industry and its regulatory body. Eighty four percent (84%) of respondents said this kind of collaboration was vital to find the most effective ways to work within the rules without the bottom line being hit.
A vast majority (81%) of those polled were generally supportive of their company’s board. Forty eight percent (48%) said they felt their board was aware of the rules but could do more to ensure they are followed effectively while 34 percent said they felt those at the top of their organisation were proactive and very aware when it came to ever- changing rules and regulations.
“It’s about a company becoming connected right down from the board to the very extremities of the business. It’s the head of audit, the head of risk, the compliance officer, the general counsel, the corporate secretary. Everyone needs to be involved,” Craig said.
FX-MM says: For additional perspective on regulation and the challenges it presents, be sure to read guest blogger Kevin Neville’s latest views.