India presents gloomy picture in new compliance trends survey

MUMBAI, INDIA: A new compliance trends survey report has thrown startling figures on India.

According to the survey conducted by Deloitte, 26 percent organizations have a full time chief compliance officer (CCO) compared to 58 percent companies who have a CCO at a global level.

The survey pointed that though 62 percent of the Indian companies have a designated CCO, a majority of them have an additional responsibility.

Of the 37 Indian respondents, the single largest industry group represented was consumer & industrial products at 19 percent, followed by technology, media and telecommunications and financial services at 14 and 11 percent respectively.

The survey added top compliance officers generally have the right reporting structure in their company to maintain their independence. For India, 48 percent CCOs report to the CEO and 22 percent report to the board vis-a-vis 36 percent to CEOs and while 21 percent go to the board at the global level.

According to the survey, 78 percent Indian organizations perform an enterprise-wide compliance risk assessment with 43 percent of them doing it on an annual basis. Fourteen percent Indian organizations outsource or co-source their employee and ethics hotline as compared to 39 percent global organizations; 24 percent organizations do not outsource any of their compliance activities.

The survey report said the sudden increase in the regulatory enforcement in India has catapulted compliance risk on top of the board, management and audit committee agenda. Additionally, it observed that the regulatory regime in India continues to be complex requiring regular interactions with multiple regulators.

Approximately 92 percent of the Indian respondents mentioned code of conduct as the topmost area of responsibility of the compliance function. Globally, the compliance training was considered as the top responsibility.

The report said 57 percent of Indian organisations measure the effectiveness of their compliance programmes. The most common metrics CCOs use to gauge their compliance effectiveness are internally focused: internal audits, analysis of self-assessment results, feedback from employee ethics survey, analysis of hotline calls, etc. About 81 per cent respondents were confident about the metrics they were tracking. Correspondingly, 16 percent were not confident that their information technology systems captured and reported all compliance data necessary to get a good sense of effectiveness.

“With the increased transparency in terms of board level compliance reporting, there is still a long way to go to integrate compliance as a strategic partner in business,” the report noted.

Globally, 364 companies were considered for this survey, out of which 37 were from India. The survey says 17 per cent Indian respondents held the title of CCO, chief ethics officer, or chief ethics and compliance officer; six per cent held some other C-level title (chief risk officer, chief audit executive); 20 per cent held a variety of titles at the vice-president level.

The rest of the Indian respondents held a range of other titles - director of business conduct, director of anti-corruption audit, deputy compliance officer, business unit compliance officer, etc.