This Week in XBRL: Compliance Among Last Concerns of CEO’s and CFO’s

Earlier this month, researchers at Compliance Week came upon a 2011 Forrester white paper in which “business decision makers” were asked to rank their primary concerns for the upcoming year. The universal thread that connected decision makers’ responses was a general lack of concern for compliance and government regulations.

“When Forrester asked business decision-makers from North American large enterprises to list their company’s top priorities for the coming year,” the report states, “complying with government regulations and requirements was an uninspiring 10^th on the list.” This put compliance well into the lower half of a list of 18 concerns which also included

• Grow overall company revenue
• Acquire and retain customers
• Lower the firm’s overall operating costs
• Improve your customer relationships and
• Expand into new geographic markets

It’s clear that growing revenue and acquiring customers should be top priorities for CFO’s – and indeed, both options ranked in the top three choices – but CFO’s should also be aware of how significant a concept like compliance is in those areas. Noncompliance can lead to massive fines, loss of license, and countless hours of lost time, so there is no reason for CFO’s and other executives to be so dismissive of it.

Other surprising statistics from the report showed that a total of 50% of executives had no plans or interest in pursuing software designed to regulate and monitor compliance. Strangely, the report also showed that up to 58% of executives lacked confidence in their company’s ability to handle compliance challenges in three key areas: technology, processes, and people.

What do you think are the take-aways from this kind of information? It seems counter-intuitive for executives to accept that their company is unprepared for compliance, but that they don’t consider it to be an area of concern. Are executives poorly informed about compliance risks? Do they lack a fear of reprisal? Tell us your thoughts in the comments below.

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