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Belgium’s Compliance Risk Management Strategies in the Spotlight

A recent benchmark survey conducted by Deloitte Belgium has revealed that compliance risk management strategies are not yet up to par in many Belgian companies. The survey, which is part of an annual series designed to gauge the challenges faced by compliance functions across all corporate sectors, highlights the need for companies to prioritize compliance and embed a culture of ethics within their organizations.

Compliance on the Rise

Compliance has become an increasingly important topic on the agendas of company management and board meetings in Belgium. The rapidly changing and globalizing world, combined with new or strengthened laws, regulations, and guidelines, has created a complex compliance landscape. The focus on acting ethically and the rise in enforcement actions through existing regulations have increased fines imposed on companies and individuals.

The Compliance Function: A Maturing Concept

According to the survey, about 53% of Belgian companies have only set up their compliance function within the last five years. While setting up separate and independent compliance functions is a growing trend, many companies still combine this function with their legal department. The creation of a separate compliance officer or department is linked to strong regulatory pressure and the occurrence of compliance incidents.

Challenges in Organizing Compliance

Companies face several challenges in organizing compliance within their organizations. Some of these include:

• Lack of formalization: The absence of a compliance charter defining roles, responsibilities, and areas of focus for compliance.
• Scope expansion: Companies need to make choices about which regulatory requirements to prioritize.
• Balancing classic and new regulations: Companies are trying to find a balance between traditional subjects such as anti-bribery and corruption, and newer regulations such as privacy and transparency.

Awareness Creation and Training: The Next Step

While many companies are trying to find a balance in the scope of their compliance function, awareness creation and training remain key attention points. Companies need to ensure that all employees understand their roles and responsibilities in maintaining a culture of ethics within the organization.

The Way Forward

Embedding a compliance culture requires management support, but also awareness creation among middle managers who need to advocate the importance of compliance. Potential misalignment between compliance requirements and business requirements can restore compliance in terms of business priority. To ensure effective compliance risk management strategies, companies need to invest in budget and resources aligned with their desired risk appetite and use the right indicators to assess compliance.

Conclusion

The survey highlights the need for Belgian companies to increase their attention to compliance from a regulatory and reputational perspective. As the outside world continues to expect more from companies in terms of ethics and accountability, it is essential that companies prioritize compliance and embed a culture of ethics within their organizations. The overall conclusion is clear: “Comply or die”.