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Business has assessed the state of compliance development in Ukraine, – EBA survey

08/ 06/ 2021
  This year, for the first time, the European Business Association conducted an expert study of the current state of compliance and corporate ethics in Ukraine - International Compliance Index - in partnership with Vasil Kisil & Partners Law Firm. Besides, with the assistance of the International Compliance Association (ICA), we were able to conduct a similar survey among businesses in the UK to track common trends and differences. View the presentation Thus, the integrated index in Ukraine is 3.70 points out of 5 possible and appeared to be in the neutral plane. For the UK, this figure is 4.24 points. Among the components of the index, the highest score was given to the average estimation of 8 criteria of business compliance maturity - 4.25 points. Accordingly, the general level of adherence to compliance among the business community of Ukraine was rated lower by experts at 3.15 points. The compliance maturity consists of the following criteria: company procedures, compliance risk and controls, senior managements adherence to compliance practices, due diligence verification, communication of compliance policies, compliance monitoring and auditing, authority and resources given to compliance officers, whistleblowing procedure. Among the above criteria, the companies rated the relevance of compliance procedures and policies in the company as the best, and compliance monitoring and auditing as the worst. Almost half of the companies, namely 43% believe that the general level of adherence and understanding of compliance principles among the business community in Ukraine is at an average level, 26% think that it is high, 7% - very high, and the other 22% consider that it is low or very low. At the same time, respondents from the UK rated the level of compliance development in their business environment mostly as high or very high (63% of respondents), and another 17% consider it average. The survey demonstrates some insights on the size of a company in Ukraine and its level of compliance development. Thus, small companies assess their level of compliance development the best, then large companies come second, and the medium ones are in third place. At the same time, the level of compliance development in the international companies is significantly higher than in the local ones. So, 42% of all the companies involved external advisors to improve the compliance program or conduct internal investigations.  Anna Derevyanko. EBA Executive Director. Equal rules of the game are an important prerequisite for establishing a favorable business environment in the country. However, what is even more important is the willingness of market participants to adhere to these rules. The Index showed that the EBA member companies have a sufficient level of adherence to compliance principles, but surely, we still can achieve more in this realm. Therefore, it is necessary to proceed with the evaluation of compliance development and the introduction of best practices to the local business community. It should be the way towards greater transparency in the system of business relations. Andrii Sliusar. Senior associate, Vasil Kisil & Partners. Vasil Kisil & Partners has systematically emphasized the importance of adhering to an ethical approach and anti-corruption practices not only in providing legal services but in doing business in general. It is gratifying to note that, as shown by the survey, EBA brings together companies that care about maintaining and developing the compliance component of the business. Also, according to the respondents’ answers, we see a trend of involving external advisors to improve the compliance function of the business. We believe that thanks to joint efforts, the index will only grow in the future, and this will be reflected in the daily activities of Ukrainian companies. For reference: International Compliance Index was first сonducted by the European Business Association in 2021. The survey aims at benchmarking the development of corporate culture, compliance, and business ethics in Ukraine and the United Kingdom to track common trends, tendencies, and differences.  The integrated index consists of two equivalent components: General level of adherence to compliance among the business community of Ukraine; Average estimation of 8 criteria of business compliance maturity. Altogether, 157 CEOs, lawyers, HRs, and compliance officers of the EBA member companies, and 95 compliance officers of the ICA network participated in the survey which was carried out from April 12 to April 28, 2021. In 2021 the survey was conducted jointly with Vasil Kisil & Partners Law Firm.    

This year, for the first time, the European Business Association conducted an expert study of the current state of compliance and corporate ethics in Ukraine – International Compliance Index – in partnership with Vasil Kisil & Partners Law Firm. Besides, with the assistance of the International Compliance Association (ICA), we were able to conduct a similar survey among businesses in the UK to track common trends and differences.

View the presentation

Thus, the integrated index in Ukraine is 3.70 points out of 5 possible and appeared to be in the neutral plane. For the UK, this figure is 4.24 points. Among the components of the index, the highest score was given to the average estimation of 8 criteria of business compliance maturity – 4.25 points. Accordingly, the general level of adherence to compliance among the business community of Ukraine was rated lower by experts at 3.15 points.

The compliance maturity consists of the following criteria: company procedures, compliance risk and controls, senior management’s adherence to compliance practices, due diligence verification, communication of compliance policies, compliance monitoring and auditing, authority and resources given to compliance officers, whistleblowing procedure. Among the above criteria, the companies rated the relevance of compliance procedures and policies in the company as the best, and compliance monitoring and auditing as the worst.

Almost half of the companies, namely 43% believe that the general level of adherence and understanding of compliance principles among the business community in Ukraine is at an average level, 26% think that it is high, 7% – very high, and the other 22% consider that it is low or very low.

At the same time, respondents from the UK rated the level of compliance development in their business environment mostly as high or very high (63% of respondents), and another 17% consider it average.

The survey demonstrates some insights on the size of a company in Ukraine and its level of compliance development. Thus, small companies assess their level of compliance development the best, then large companies come second, and the medium ones are in third place. At the same time, the level of compliance development in the international companies is significantly higher than in the local ones. So, 42% of all the companies involved external advisors to improve the compliance program or conduct internal investigations. 

Anna Derevyanko EBA Executive Director
Equal rules of the game are an important prerequisite for establishing a favorable business environment in the country. However, what is even more important is the willingness of market participants to adhere to these rules. The Index showed that the EBA member companies have a sufficient level of adherence to compliance principles, but surely, we still can achieve more in this realm. Therefore, it is necessary to proceed with the evaluation of compliance development and the introduction of best practices to the local business community. It should be the way towards greater transparency in the system of business relations.
Andrii Sliusar Senior associate, Vasil Kisil & Partners
Vasil Kisil & Partners has systematically emphasized the importance of adhering to an ethical approach and anti-corruption practices not only in providing legal services but in doing business in general. It is gratifying to note that, as shown by the survey, EBA brings together companies that care about maintaining and developing the compliance component of the business. Also, according to the respondents’ answers, we see a trend of involving external advisors to improve the compliance function of the business. We believe that thanks to joint efforts, the index will only grow in the future, and this will be reflected in the daily activities of Ukrainian companies.

For reference:

International Compliance Index was first сonducted by the European Business Association in 2021.

The survey aims at benchmarking the development of corporate culture, compliance, and business ethics in Ukraine and the United Kingdom to track common trends, tendencies, and differences. 

The integrated index consists of two equivalent components:

  • General level of adherence to compliance among the business community of Ukraine;
  • Average estimation of 8 criteria of business compliance maturity.

Altogether, 157 CEOs, lawyers, HRs, and compliance officers of the EBA member companies, and 95 compliance officers of the ICA network participated in the survey which was carried out from April 12 to April 28, 2021.

In 2021 the survey was conducted jointly with Vasil Kisil & Partners Law Firm.

 

 

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