The continued expansion of retail and consumer (R&C) companies into new businesses such as pharmacies and financial services products, as well as companies’ expanded geographic footprints, have contributed to the need for these companies to develop corporate-led programs that manage compliance and ethical risks. However, according to a new PwC study, this industry is still 17% behind the overall population of respondents (80%) in developing such programs.
PwC’s State of Compliance 2013 survey, culled from over 780 responses in from 48 leaders in the retail and consumer field, reports that the establishment of chief compliance officers in the R&C industry is a new phenomenon. Only 53% of R&C companies have had a CCO for more than five years, compared with 64% of companies in the overall survey.
“Considering the increased breadth of compliance issues the industry encounters, we anticipate that more R&C companies may have compliance committees in the near future,” the report states.
The make-up of committees in R&C companies is different from those of other industries, as well. While the mix of legal, compliance, internal audit, finance and human resources are similar, internal audit and finance titles are more strongly represented on R&C compliance committees (79% and 68%, respectively) than in other industries (61% and 58%, respectively). Conversely, business units, information technology and procurement are less likely to be found on R&C compliance committees (21%, 21%, and 11%, respectively) than in other industries (37%, 41%, and 19%). The PwC analysts were also surprised that supply chain disciplines were not better represented.
“Given the nature of risks such as bribery and corruption and business continuity, we are surprised that sales and marketing, supply chain and operations/business units are not more heavily represented on compliance committees,” the report states.
However, more R&C respondents identified supply chain/procurement as a future risk than other industries (17% vs. 8%).