Compliance functions and risk managers said that their top strategic priorities over the coming 18 months are keeping abreast of regulatory changes and mitigating emerging risk, according to Thomson Reuters.

Half of respondents to the survey underpinning the report said they had noticed a recent shift in their organisations from viewing compliance as a tick-box exercise to regarding it more as a strategic activity.

Strategic perspective

“In the past, companies’ risk and compliance functions have often been dismissed as cost

centres intent on stifling innovation and opportunity,” the report said. “However, the dynamics of corporate leadership are shifting, and these teams are now increasingly considered strategic partners to the business, fundamental to supporting stability, improving efficiency, and maximizing growth.”

The survey found that most organisations had about 15 people dedicated to risk and compliance, but this number had increased in recent years as businesses seek to cut costs by insourcing those activities. In fact, 63 per cent said more risk and compliance work has been

insourced at their organisations over the past 2 years: 39 per cent said they are insourcing more of that work every year.

ESG evolution

A key driver for these changes has been the rise in regulation around Environmental, Social and Governance reporting, the report said. Over half of respondents (57 per cent) said that had resulted in compliance roles becoming more specialised and had increased the use of more advanced technologies.

But there is still work to be done. Almost four in ten organisations said they had not clearly defined ESG, according to a report in the Harvard Law School Forum this summer. A significant minority (17 per cent) of organisations said they did not know who was responsible for ESG in their businesses.

“Whereas a company’s status as public or private was significantly correlated with whether the company had clearly defined ESG, that characteristic does not appear relevant to who oversees ESG,” the report said. “Indeed, the survey indicated that private companies were as likely as public companies to have an ESG officer.”