Fears that businesses in Britain could fall foul of new laws, resulting in heavy fines and even prison sentences for offending CEOs, found some substance in a survey, the results of which were published today, showing that 40 per cent of UK companies have zero knowledge of the regulations they need to comply with.
"Failing to comply with regulations will leave hundreds of executives and their businesses in danger of loss of reputation, fines or - in extreme cases - imprisonment," warned Chas Moloney, general manager of business solutions marketing at Canon UK, sponsors of the survey, which polled 1,900 business decision makers and IT managers in Europe through CNET.
In the United States, the Sarbanes-Oxley Act came into force a year ago to provide stricter accounting controls in an effort to prevent the sort of malpractice that led to the Enron crisis, or avoid the loss of corporate data in the event of a catastrophic breakdown such as happened at the 9/11 disaster, as affected many businesses based at the World Trade Center in New York.
Today's survey suggests that outside the US, confusion reigns among business leaders over the amount of compliance that is expected of them when dealing with America, despite more than half of businesses saying that they are affected.
"With ever more red tape and regulation affecting day-to-day business activities, regulatory compliance has become a major issue for all areas of business," Mr Moloney said.
"Organisations need to develop strategies for the management of their information. There is a long way to go in the UK before we can confidently say that compliance is understood." Mr Moloney said that increasingly, clients of his company were seeking their compliance advice from their IT and print equipment suppliers. The survey nshowed that 28 per cent of businesses have no idea where to seek information about their legal obligations.
Even the more mundane penalties facing offenders against the regulations of Britain's Data Protection Act could have severe consequences at a time when it is estimated that everyone in the UK is now generating an average of 800 megabytes of data each year - the equivalent of four full, four-draw filing cabinets of documentation. "All that data has to be managed in a proper, legal manner," Mr Moloney said.
"What's most concerning is that many firms still haven't got a strategy in place, and of those who have, 39 per cent of UK businesses haven't even set themselves a deadline for implementing it."
