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#Governance, Risk and Compliance

Compliance: votes from the Spanish jury

International Compliance Association

business compliance , compliance , Spain , Transparency International , World Bank

Enforcement remains one of the unknown quantities following Spain's long-awaited Compliance reform in mid-2015. 

As the OECD pointed out at a recent Anti-Corruption Forum in Madrid, having a strict Compliance law in the Penal Code is one thing, but the world is watching for real consequences of corporate misconduct in the Spanish market.

At Impact on Integrity España, we are always keen to measure and track ROI (Return on Investment) on our clients' effective compliance programmes. The World Bank's 2016 report Doing Business: Measuring Business Regulations contains fascinating metrics on contract enforcement. These offer valuable benchmarks for Compliance prosecutions in Spain and other countries.

The report shows considerable "room for improvement" on the time taken to enforce a contract in many European countries, not least in Spain, which comes in at #39 (averaging 510 days). This compares to the UK at #33, France at #14 and Germany at #12 (429 days).

Why does this matter? Well, to quote The Economist: "Long delays make it harder to do business; Italy estimates that legal sloth shrinks its GDP by 1%". Solutions proposed include: "Promoting judges based on their case-management skills, and getting them involved in budgeting, can help to focus their minds [...] One problem is that southern Europe simply has too many [lawyers]. Greece and Italy have almost 400 lawyers per 100,000 residents. France makes do with only 85. Jean-Paul Jean, a French judge who chairs the Council of Europe’s justice committee, notes that there is a “strange overlap” between the countries where trials take a long time and those with lots of lawyers. Numerous, eloquent and organised, they form a powerful lobby in most southern European countries."

Cumplimiento en EspañaSince 2012, the Sustainable Development Solutions Network (SDSN), a global initiative for the United Nations, has produced the World Happiness Report. SDSN employs an international group of economists, neuroscientists, and statisticians to survey citizens on their subjective wellbeing and produce a comprehensive list of the happiest countries in the world.

This ranking for Spain in the World Bank report sits just below the country's rankings on the United Nations' World Happiness Report, as well as on the Corruption Perception Index from our friends at Transparency International - Spain occupies 36th spot on both. By comparison, the UK, France and Germany occupy places 21, 29 and 26 on the UNWHR and places 10=, 23 and 10= on the TI CPI respectively. Overall, there appears to be significant correlation between this World Bank report on contract enforcement and the TI index on corruption perceptions.

Is this a precedent for what we can expect to see on Compliance enforcement in Spain? Time will tell. Just six weeks now till Eurovision...do we hear "España, diez puntos", or is that wishful thinking?

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