Grant Thornton survey finds resources being diverted from regulatory efforts to address cyber risks
CHICAGO, May 19, 2015—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 cyber risk, 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.
Additional highlights from the 2015 Corporate General Counsel Survey include:
- An overwhelming 58 percent of in-house counsel surveyed believe their organizations are somewhat prepared to effectively respond to data breaches.
- Corporate counsel cite more than 10 different titles as having primary responsibility for responding to data breaches, including Chief Information Officer, Chief Security Officer, General Counsel, Chief Compliance Officer, Chief Financial Officer and Chief Risk Officer, among others.
- While 91 percent of companies made changes to the way they manage their risk, 45 percent of survey respondents indicate that they are not sure that their approaches are effectively reducing corruption and bribery risk.
Please visit Grant Thornton’s 2015 Corporate General Counsel Survey for a copy of the survey findings.
About Grant Thornton LLP’s 2015 Corporate General Counsel Survey
The 2015 survey of corporate counsel aimed to measure corporate counsels’ assessment on the key threats to business growth. The survey was administered by ALM Marketing Services online from March 3 to March 17, with 254 in-house counsel responding. Respondents came from public and private companies with a wide range of revenues from across the United States. Organizations were distributed across industry sectors, including finance, insurance, manufacturing, health care, energy and technology.
About Grant Thornton LLP
Founded in Chicago in 1924, Grant Thornton LLP (Grant Thornton) is the U.S. member firm of Grant Thornton International Ltd, one of the world’s leading organizations of independent audit, tax and advisory firms. In the United States, Grant Thornton has revenue in excess of $1.3 billion and operates 57 offices with more than 500 partners and 6,000 employees. Grant Thornton works with a broad range of dynamic publicly and privately held companies, government agencies, financial institutions and civic and religious organizations.
“Grant Thornton” refers to Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. Services are delivered by the member firms. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. Please see grantthornton.com for further details.
