Cost of Non-Compliance: $108 Million and Counting

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Cost of Non-Compliance:  $108 Million and Counting

turteltaub-adam-200x200-150x150By Adam Turteltaub
adam.turteltaub@corporatecompliance.org

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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