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Corporate Counsel Say Regulatory Environment Bad for Business


June 01, 2015 (Information Technology Business) Corporate counsel perceive the current regulatory environment as bad for business, according to Grant Thornton LLP's 2015 Corporate General Counsel Survey. More than two-thirds (69 percent) of respondents say that the current regulatory environment made it harder to do business, while almost two in five (39 percent) believe the current regulatory environment has diverted resources from the company's core competencies.



Corporate counsel perceive the current regulatory environment as bad for business, according to Grant Thornton LLP's 2015 Corporate General Counsel Survey. More than two-thirds (69 percent) of respondents say that the current regulatory environment made it harder to do business, while almost two in five (39 percent) believe the current regulatory environment has diverted resources from the company's core competencies. Twenty-nine percent and 21 percent, respectively, indicate that the current regulatory environment decreased profits or impeded growth. "The sentiment of the corporate counsel surveyed is consistent with many corporate officers," said Brad Preber, national managing partner of Grant Thornton's Forensic and Valuation Services practice.

"On the whole, companies have not yet found the right balance between regulatory compliance, growth and profitability." Given the current regulatory climate, companies are taking new steps to manage their regulatory risk. The most frequent changes are strengthening policies and procedures (70 percent) and increasing education and training (60 percent). Forty-one percent are also engaging outside advisers/consultants and 36 percent are adding internal compliance personnel. Only 28 percent of in-house counsel have implemented software tools, while just 21 percent have utilized data analytics. Despite the fact that corruption and bribery risk remain at historically high levels, few businesses have increased resources devoted to managing them.

One possible explanation is the explosion in concern over cybersecurity. While only 21 percent of corporate counsel say their businesses have increased the time and resources devoted to managing corruption and bribery risk, an overwhelming 69 percent have increased the time and resources devoted to managing cybersecurity and data privacy risk since last year. "The courts, public opinion and the federal government have made it clear that cybersecurity and data privacy are a front-burner issue," said Skip Westfall, managing director of Forensic Technology Services and co-leader of Cybersecurity Services for Grant Thornton.

"Ignoring this risk is very dangerous and can be very costly." Survey results indicate that more than 90 percent of corporate counsel say their companies have taken action to mitigate cyberrisk, most commonly by adding data security measures (67 percent), preparing policies and procedures (59 percent), and conducting training (59 percent). However, despite all the efforts on cybersecurity, only 17 percent of the in-house counsel surveyed believe their organizations are very well-prepared to effectively respond to data breaches. 

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