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Wednesday, October 30, 2013

More Companies Are Discovering the Value of Compliance

Budgets and staffing for ethics and compliance are on the rise as the costs of noncompliance become more apparent

According to a study released this week, fifty-two percent of the publicly traded companies in the United States have increased spending on compliance and ethics in 2013 and fifty-four percent are planning on spending increases in 2014. Management’s perception of the value of compliance was also shown to rise in the survey, which was conducted by the Health Care Compliance Association (HCCA) and the Society of Corporate Compliance and Ethics (SCCE).

The program budgets for ethics, compliance and staffing showed steady increase and the trend is expected to persist in 2014, says SCCE’s CEO Roy Snell. "This isn't just good news for compliance programs," he said. "It's good news for business. Greater commitment to compliance and ethics programs means companies are seeing the value of compliance in mitigating their risks and avoiding the disastrous expense that comes from a compliance failure."

Compliance professionals who witnessed their budgets increase was at 38 percent, while those who saw a decrease were at 12 percent of survey takers. This is a ratio of more than three to one and the ratio for 2014 was more than four to one. For 2013, nine percent of compliance professionals reported a greatly increased budget, while 29 percent said the budget was increased somewhat.

The increases, however, were not evenly dispersed. Healthcare lagged behind non-health care companies reporting only a 35 percent increase in budgets. "Look at the headlines of the business section and you can see the price of a compliance failure. These figures show that more companies are getting it and realizing that compliance is a good investment," said Snell.


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