UK Unprepared for 'US Style' Regulatory Aggression
A survey by the LSE, for international law firm DLA, has discovered that despite an increasingly aggressive regulatory environment, UK company directors have little idea of the risks and liabilities they face. Companies are unprepared to deal with a regulatory crisis and fail to monitor and influence new regulations. While 96% of respondents believe regulatory risks are growing, almost a third (30%) of Boards are unaware of, or do not know about, the activities in their companies which could lead to a regulatory intervention. Most startling is that less than one in five (18%) are ‘very confident’ in their risk management processes. Almost a quarter of respondents (24%) have no crisis management plans and where they exist the majority are inadequate. Neil Gerrard, Head of DLA’s Regulatory Group, said: ‘Companies must do more to understand and manage regulatory risk. Regulatory investigations, whatever their outcome, can seriously damage brand equity and personal reputations. Share prices can fall sharply. Interventions can also unsettle relations with investors, clients and employees.’ The Report was undertaken by Professor Baldwin of the London School of Economics and Richard Andersen of the Corporate Risk Group. It is based on 50 in-depth interviews with senior staff from FTSE 250 or equivalent-sized companies, over the period March-July 2002.