On February 26 FIFA passed a host of reforms designed to help put its messy corruption scandal behind it.
Whether the reforms are ultimately successful is something only time will tell. But, one thing is clear: the FIFA scandal is a picture perfect postcard for the cost of non-compliance.
In 2014, a World Cup year, FIFA reported that it had netted $2.4 billion off of the event. In 2015, FIFA reported it will lose $108 million. Worse for them, the hemorrhaging will continue. According to a Reuters report, “FIFA had already said it was proving difficult to renew sponsorship deals, and that no major contracts would be signed before a new president was in place.”
In sum, there are very real, very hard dollars lost in this scandal.
FIFA is not alone in the headlines reporting long-term, big-dollar costs to non-compliance.
Volkswagen has delayed releasing its annual reports and postponed its shareholder meeting as a result of the ongoing diesel crisis. Fines, settlements and the cost of “fixing” hundreds of thousands of vehicles will be in the billions. Worse may yet be coming, with a US Federal Judge giving the company a March deadline to disclose whether it had found a solution to the emissions problems. If no acceptable solution is found, the cost will likely go even higher.
In sum, the cost of a compliance failure is not theoretical. As these cases show, it is very real and very expensive. And very good at getting companies the worst kinds of press coverage.
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