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Companies in the United States say their top two ethics and compliance concerns aren’t sexual harassment and corruption—rather electronic data protection and data privacy. This is according to the LRN 2008 Ethics and Compliance Risk Management Practices Report, a study that LRN has conducted for two years.
Sequentially, survey participants ranked data protection, data privacy, and conflicts of interest as their top three concerns—far higher than other perceived risks including, respectively, sexual harassment, environmental safety and health issues, corruption, and bribery.
LRN defines itself as a global leader in ethics and compliance management and education serving leading companies in 120 countries. It surveyed more than 460 senior ethics, compliance, legal, risk and audit professionals to uncover trends and risk areas. Of those surveyed, 52 percent cited electronic data protection as the top risk, with 47 percent citing data privacy as a risk concern.
Most of those worries have to do with the growing amount of electronic data generated by companies nationwide and new data privacy laws and regulations, concerns not solely limited to the United States. Germany, for example, has instituted specific new laws on data protection, LRN states. In this country, 47 states have ratified separate data privacy laws protecting individuals from fraud and malicious use of their data.
In a recent poll by Deloitte Financial Advisory Services LLP (Deloitte FAS), nearly two out of every five executives (39.7 percent) feel that data volumes in the organizations they work for are increasing in size and becoming unmanageable.
Of particular concern, the LRN report states, is compliance with the eDiscovery Rule that went into effect in 2007.
The rule states that companies must manage and maintain all electronic data, including e-mails and instant messages, which might be relevant in future legal disputes.
“Discovery is a very serious issue to business today,” Bruce Hartley, a director in the Analytic and Forensic Technology (AFT) practice of Deloitte FAS, said in a previous release. He noted that in the past few years, defendants have faced millions in sanctions, penalties and jail time.
LRN noted that banking, financial, insurance and health care industries have more rules and regulations regarding data privacy than other trades.
As a result of the concern over data privacy and other issues, the LRN report says that many companies are working diligently to make sure that their employees are trained properly to prevent risk. However, nearly six out of 10 companies say they lack resources to do so.
And, in a cause for even greater concern, the study points out that one of the most significant challenges companies say they face is detecting violations—this despite the prevalence of anonymous reporting channels. Employees generally lack motivation to report a violation or fear retaliation if they do, the report states.
Among other key findings:
In order to meet compliance targets, LRN recommends that companies:
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