Written in conjunction with TMF Group, based on the Global Benchmark Complexity Index

In the recently published Global Benchmark Complexity Index, TMF Group’s team of international expansion experts were asked to tackle this important question by ranking the compliance issues that arise most frequently in their day-to-day conversations with multinational business clients.

Here are the top five global compliance concerns, in order of priority level:

1. Whistleblowing
   In an effort to raise their global corporate governance standards, more corporations are dedicating greater resources to the development of whistleblowing programs. The key benefit of these programs is that they allow corporations to detect and address internal weaknesses before these issues become public knowledge, thereby protecting stakeholder value.
   
   Compliance failures at any of a multinational firm's global outposts can do serious reputational harm and may even result in fines. The current precedence given to whistleblower programs underlines awareness of this issue among corporate leaders who understand the relationship between share value and airtight compliance.
2. Bribery and FCPA Compliance
   According to the Trace Global Enforcement Report, non-U.S. enforcement actions regarding the alleged bribery of foreign officials are down significantly, dropping 73 percent in 2015 alone. That figure represents a seven-year low.
   
   Despite this pronounced drop in enforcement, non-U.S. investigations into alleged bribery of foreign officials remains relatively high. In fact, of the 251 active investigations into alleged bribery, half were being pursued by non-U.S. entities (representing a total of 26 nations), as of Dec. 31, 2015. The report also states that more than 70% of investigations and enforcement actions involved non-U.S. companies and individuals in Europe.
3. Cybersecurity
   Thanks to a number of high-profile corporate security breaches (and cybersecurity compliance enforcement) in 2015, the topic of cybersecurity remains top-of-mind for world media and global business leaders. While many experts will caution that no security program is perfect and breaches are inevitable, a lack of skilled cybersecurity personnel increases the odds of a successful attack, while making any recovery from such an attack far more difficult.
   
   Corporate leaders are also keeping a close eye on 2018, when new European data protection regulations will come in to force. These laws will dramatically increase the penalties associated with data breaches, according to James Mullock, an attorney with the law firm Bird & Bird. Mullock suggests that having dedicated data protection officers report directly to the board would be "a sensible measure."
4. Competition Law
   Thanks to a European Union (EU) directive passed in 2014, it will become easier for those negatively affected by antitrust violations to seek damages through private legislation. However, it is up to individual EU member countries to pass their own laws to implement the agreed EU framework governing antitrust violation damages.
   
   Given that the deadline to pass such laws is December 2016, corporate leaders expect Europe to have a busy year with regard to competition legislation and proposals.
5. Intellectual Property
   Companies that cannot effectively protect their intellectual property in foreign markets are at a profound disadvantage when competing globally. In that vein, chief IP counsel have listed foreign threats, the impact of the Leah-Smith America Invents Act (AIA) on the patent process, dissatisfaction with information technology departments and the limited amount of resources available to them as primary concerns in this area.
   
   Moving forward in 2016 it will be imperative that chief IP counsel increase their vigilance regarding foreign IP threats and theft. This is due, in part, to the lack of confidence these executives expressed last year concerning the ability or desire of foreign governments to address these issues.

Conclusion

Since even small compliance changes can have significant implications in global business, it is critical that companies examine existing programs or implement new ones. By staying ahead of the curve on compliance, companies are well-positioned to successfully navigate compliance issues in 2016.

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To learn more about how CT can help you better manage your global compliance needs, contact a CT representative at 844-318-1457 (toll-free U.S.).

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