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Compliance for growth as a way out of the financial crisis
Governance, risk management and compliance (GRC) is an area that has been given increasing attention in recent years.
The financial crisis raised new questions about companies’ responsibilities in society.
Copenhagen Compliance is an advisory and consultancy organisation that organises international conferences, proposing that new standards in GRC are both the way out of the current crisis and the key to avoiding another.
Asking for trouble
Kersi Porbunderwalla, the secretary-general of Copenhagen Compliance, sees big challenges to overcome.
“The current global business environment is a consequence of the lack of structured focus on good governance, implementating risk management and monitoring compliance,” he explained.
“In fact, when GRC processes are not compatible – like for example when we repackage billions of dollars’ worth of these financially toxic instruments and sell it to our best customers – we are asking for trouble.”
Porbunderwalla founded Copenhagen Compliance in 2006.
Prior to this he was business controller for ExxonMobil Danmark and has advised a number of multinationals, including IBM, Shell, BP and Volvo.
The organisation uses Copenhagen in its name because of Denmark’s reputation as one of the least corrupt countries in the world and being at the forefront of introducing good governance.
Copenhagen Compliance later produced the Copenhagen Charter – a document aimed at bringing a systematic approach to anti-corruption, fraud and bribery work.
It consists of 12 areas for formulating strategies to combat corruption and fraud.
Growth through compliance
As a response to the perceived failures of the current global business environment, Copenhagen Compliance organises annual GRC summits in Copenhagen, where experts meet industry professionals to discuss developments in the field and attempt to shape policy.
In the past the conferences have addressed issues such as IT compliance, implementing EU compliance (see factfile) and stimulating growth by creating company values and through improving business practices.
“The escalation of the continued euro crisis, uncertain energy prices and global deficits will provoke a much more generalised flight from risk,” contended Porbunderwalla.
“This will affect growth and performance if these tensions are accompanied by significant financial volatility and losses in confidence.
These are the worries of a perfect storm and we must do everything possible to avoid it.”
-In 2002, the Sarbannes-Oxley (SOX) Act imposed GRC requirements on US-listed companies and brought international attention to the field
-From 2008 to 2009, the EU implemented the so-called EuroSox directives to promote GRC
-The Copenhagen Compliance 2014 initiatives for good governance focus on:
Encouraging shareholder engagement
Enhancing transparency between companies and investors
Accountability in facilitating cross-border operations of global undertakings
Communicating the principles and methodology of self-regulation and monitoring
Heightening awareness and CSR footprint in the business community
-The next Annual European GRC summit will take place in Copenhagen from 22 to 23 September 2014
-According to the 2013 Transparency International rankings, the five least corrupt countries in the world are: Denmark, New Zealand, Finland, Sweden and Singapore