By Regulation we mean national law and its extensions such as defined by Regulators and Standards, and the way its applied in practice through Policies and Procedures. The problem is compounded through International Trade and Operations, which covers Regulations
from multiple jurisdictions.
An annual CEO survey has identified regulation overload as the number one issue since 2008. This is not surprising as the Compliance Complexity Index Report shows that the number of regulatory alerts globally has risen from 7,704 in 2008 to an overwhelming
56,321 in 2017.
Other research shows the impact of non-compliance is 2.7X operationally more expensive.
Even more worrying, recent research showed the top 20 banks for non-compliance have paid out a staggering US$ 0.46 trillion over a 10 year period. But its not just the banks. In the UK, the NHS is spending 2 pence in every £1 settling claims and they have
set aside a staggering £65bn for clinical negligence. In London, the Grenfell Tower Fire regulatory review, after 72 people died, stated the regulations as applied in practice is not fit for purpose. Again, in the UK Child Safeguarding regulation is spread
over 20 Acts of Parliament plus various standards and practices. Yet child safeguarding issues are getting worse and worse.
The way we expect every organisation to synthesise regulation in context to their practices is simply untenable, yet conventional wisdom still governs the way we think about regulatory governance even though compliance risks and costs continue to increase.
If regulations were a market place, it would be the world’s most inefficient market. Think about it!
So now the regulators across the world are now pushing for transparency and personal liabilities, which is now gaining more and more momentum. Firms across all sectors face an increasingly complex landscape, which includes an influx of new regulations they
must understand and comply with.
Regulation overload, rapid technological and legislative changes, increasingly stringent compliance, within both the public and private sectors, has now reached a breakpoint, making yesterday's wisdom obsolete. If only there was a way for managers and staff
to "just know" and not to spend countless hours trying, and failing, to keep current. To stay competitive you need to know, but spend as little time training, analysing, and creating regulation-based knowledge as possible.
The lack of new business models for how regulation is applied in practice is the barrier to change and not the technology. It sounds so tedious to say this last point, if you cannot measure it you cannot manage it. Yet, ask any large organisation how many
procedures linked to regulations do they have? In this case, silence is not golden, it is an indictment that unexpected non-compliance problems are going to continue.
External | what does this mean?