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The Harris Poll last week revealed nearly two-thirds (63%) of organizations see compliance issues as a critical barrier to growth. The study surveyed 305 enterprise compliance leaders in highly regulated industries, including cannabis, health care, financial services, alcohol, and pharmaceuticals.
Despite compliance being a field that enjoys sophisticated modeling and an abundance of intercommunication, those surveyed revealed that the requirement to meet constantly shifting regulatory demands can lead to lost revenue and, perhaps worse, damaged trust from consumers and employees.
While almost all (93%) of the leaders surveyed had a formal compliance structure in place, 43% felt that their enterprise wasn’t able to meet those compliance requirements, citing lack of technology, data, knowledge, and expertise.
Only half the 300 enterprise compliance leaders were prepared to update their current business operations to meet changes in regulations, and about 60% cited compliance and regulations as a main barrier to achieving their goals in new market expansion and innovation. Even more troubling, the majority of compliance leaders admitted that they are often uncertain whether their organization is operating within compliance standards, due to the dynamic nature of the regulatory environment.
Legalization means heavy compliance regulations
How can enterprise compliance professionals satisfy the requirements of legislation while maximizing vulnerability management, minimizing risk, and avoiding fireworks from the C-suite?
While pharmaceuticals and financial services are often cited as the gold standard for compliance models, the study suggests those industries look to the cannabis industry as a model for best practices. The study reveals that the cannabis industry has been forging new paths in its ability to pivot in response to rapidly evolving legislation and the worrying potential for costly penalties.
Nicole Cosby, chief compliance officer for the cannabis purveyor FylloCBD, told VentureBeat, “Keeping track of what’s required today and what’s coming next is an inhuman task. There are thousands of jurisdictions across the country. In fast-paced, highly regulated industries, the winners are the companies who know more and know it sooner.”
Compliance is an enterprise issue
What can the enterprise learn from the THC industry? Chad Bronstein, Fyllo’s CEO and founder, said, “Cannabis professionals are operating in a regulatory environment seeing daily changes across federal, state, and local levels. Cannabis businesses have been quick to embrace tech solutions — such as using industry-specific regulatory databases — that streamline compliance processes to free up resources for growth, becoming the benchmark for effective management of compliance processes at scale.”
Compliance isn’t a new issue for the enterprise, but yesterday’s solutions can’t address today’s questions. Highly regulated fields such as health, finance, and now the cannabis industry are at the mercy of conflicts between local, state, and federal regulations and reporting requirements.
Many compliance officers utilize industry-specific regulatory and reporting databases as a necessary tool for their compliance teams. Short of federal guidelines that cut across state and local jurisdictions, compliance will continue to be a source of corporate confusion, while being a growth industry for enterprise professionals.
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