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The Morning Risk Report: Compliance Boosts Foothold in C-Suite, Boardrooms

By BEN DIPIETRO

Chief compliance and ethics officers are increasingly being included in senior-level discussions about corporate strategy, showing compliance is gaining favor in boardrooms worldwide but also pointing out the challenges the function continues to face, according to a survey to be released this week by business ethics advocacy organization Ethisphere Institute and compliance services firm Convercent. The survey of 335 senior-level executives world-wide who are involved in their organization’s compliance, ethics or anti-corruption programs found 49% said they are almost always or regularly involved in strategic decisions, up from 39% in 2015.

Thirty percent said they report to the chief executive, up from 16% two years ago—with 47% saying they speak to the CEO at least once a month and more than 75% saying they are tasked with designing audits, reviewing results, attending human resources training events and incorporating compliance and ethics questions into employee surveys. What this shows, said the survey authors, “is a top-to-bottom ethical culture gaining visibility and mindshare in the executive suite and boardroom.” Good news aside, many challenges still confront ethics and compliance people, the report found, including issues with technology such as legacy systems not designed to process the huge amounts of data being generated, outdated tools and unconnected systems that can’t communicate with each other. The survey found respondents use up to 10 different systems to collect and analyze data but just 7% are connected through automated feeds. Seventy-four percent said they use email mainly to collaborate and share data, “divorcing analysis and decision-making from real-time data,” stated the report. “CECOs are trapped in details, lacking the tools to engage with the data, be responsive to issues and trends, or to gain the perspective required to tie ethics and values to the financial and strategic goals of the organization,” stated the report.

The report suggests areas where compliance and ethics officers can focus, including keeping all ethics and compliance data in one place, making better use of analytics, visualization and other tools to identify leading indicators that can improve the chances the organization can intervene before an incident occurs. “CECOs require a solid, integrated real-time platform that eliminates data silos and supports analysis and visualizations to provide leading indicators, which allows them to leverage their increased inclusion in the strategy and leadership of the organization into meaningful impact,” stated the report.

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