Ernst and Young recently issued a press release (click here) identifying the following six themes where they expect their clients to focus in 2014:
- Dealing with reputational harm and the business risk associated with cyber-crime will become part of a General Counsel's responsibility set. While this was traditionally the role of the Chief Information Security Officer, security attacks are requiring immediate and planned responses organized by inside and outside counsel. The risks associated with cyber-crime such as potential shareholder impact, risk due to state-run and industrial cyber-espionage, loss of highly valuable IP, and client data also elevates cyber-security concerns to the Board level.
- Balancing significant growth opportunities in Africa with perceived corruption risk. With 83% of African respondents polled viewing bribery and corrupt practices as wide-spread and the attention of U.S. authorities on business conduct in the region, organizations setting up operations in Africa will need to perform robust due diligence to combat these risks.
- The impact of regulation will be felt stronger than ever by the financial services industry. As the financial services industry responds to broad regulatory focus on systemic risks and reacts to the Consumer Financial Protection Bureau’s rulemaking on mortgage loans, student loans, and credit cards, regulatory enforcement pressure will increase and may also migrate to midsized banks. To combat these risks, midsize banks should reassess and enhance their risk and compliance efforts.
- FCPA compliance will remain a top priority for life sciences companies operating in emerging markets. Recent enforcement actions in China demonstrate that staying on top of different countries’ anti-corruption laws and standards presents a challenge for companies operating in this region. My recent post In Wake Of Ongoing Chinese Bribery Investigation, Glaxo Announces It Will Stop Paying Doctors To Promote Drugs provides more background and context on these risks.
- Anti-money laundering and corruption programs to face greater scrutiny. Regulatory scrutiny by global regulators and the DOJ is now moving beyond the traditional banking sector to non-banks - including credit cards issuers, insurance providers, and gaming enterprises – prompting the need to seriously review and enforce compliance programs and controls.
- The opportunity to leverage "Big Data" in the context of compliance and anti-corruption will allow companies to ask new questions. Companies now have opportunities to use data analytics to proactively monitor business data to help detect potential instances of fraud and implement effective fraud risk mitigation programs.