Over a quarter of FTSE 350 directors believe that the requirement to comply with new regulations has a negative impact on their business.
The finding is from a survey commissioned by Cartesis, the business performance specialist. Many respondents claim that precious time spent completing regulatory compliance is a distraction to managers and is perceived as a non value-add activity. This in turn is driving up costs, tying up capital and hence reducing profitability.
In addition, 33% of those surveyed feel compliance has little or no impact on the organisation. These respondents claim they are neutral on the subject of regulation or, when pressed further, said that at worst it is a nuisance.
?These results demonstrate that many companies, rightly concerned about costs, are missing the potential upside of recent compliance changes,? says John Taylor, managing director, Cartesis UK. ?Yes, the corporate governance environment is a challenge but true benefits to performance can be derived from greater insight.
?It's no secret that, for effective governance and business decisions, management needs a clear, accurate and timely view of corporate performance - a view that it can trust.
?Therefore, those people who responded negatively to the idea of regulation may have overlooked an opportunity.