Compliance Firefighting is Costing Companies Millions of Dollars Annually

A new Compliance & Risks study finds most organizations are stuck reacting to compliance failures instead of preventing them, fueling hidden costs, lost opportunities and widening evidence gaps

CORK, Ireland, Sept. 18, 2025 (GLOBE NEWSWIRE) -- Compliance & Risks, the global leader in product compliance intelligence, announces the publication of a report on product compliance goals, challenges and strategies. A copy of the report, “The State of Product Compliance 2025: Navigating Complexity and Driving Financial Value,” can be found here.

A key takeaway from the report, which included input from 498 product compliance leaders in the U.S. and Europe, is that many product compliance teams are trapped in a cycle of reaction, in which they struggle to respond to compliance issues after they’ve occurred. The result is a remediation process that takes too long and diverts attention from more strategic matters.

Another major operational struggle revealed by the study is the challenge of providing compliance proof to external parties, including regulators, certification bodies, customers and auditors. The study found it much harder to demonstrate compliance to external versus internal shareholders, resulting in a large, costly and time-consuming “evidence divide.”

Compliance As a Corporate Strategy

As global supply chains intertwine and regulations evolve, companies are under pressure to ensure their products meet internal policies, external regulations and industry standards, all while scaling and protecting their brand’s growth and reputation. Ensuring every product meets the rules in all markets is no longer a legal checkbox; it’s a strategic imperative that directly impacts revenue, market access and brand reputation. Organizations that handle compliance efficiently and transparently can unlock opportunities and gain competitive advantage.

At the same time, the bar for compliance is rising. It’s not enough to just comply; companies must be able to demonstrate compliance quickly and credibly to regulators, customers and other stakeholders. This has turned compliance into a race against time and complexity, one that many organizations feel ill-equipped to win without new approaches.

A Clear Picture of the Product Compliance Landscape

The insights in the new Compliance & Risks report are designed to power compliance professionals and business leaders with a clear understanding of the market’s most pressing needs and strategic opportunities. Compliance & Risks surveyed senior compliance leaders around the world to identify their biggest operational challenges, the priorities driving their investments in new solutions and how these dynamics differ in companies of different sizes.

The findings paint a clear picture: many teams remain trapped in reactive “firefighting” mode, executives increasingly demand measurable financial ROI and company size shapes the nature of the compliance challenge in profound ways. The shift is unmistakable; compliance is moving from simply avoiding fines to actively enabling value creation. The leaders who adapt fastest will define the competitive landscape in the years ahead. Here are the report’s key findings:

Compliance Is Predominantly Reactive

69% of leaders say remediating product compliance issues after they occur is their hardest task, making it the single most difficult activity in the study.
A pronounced “Evidence Divide” creates a last-mile challenge: 62% struggle to provide proof to external stakeholders versus just 39% for internal teams.
This reactive stance drives hidden financial costs beyond fines, including operational overhead and lost market opportunities.

Financial Impact Now Drives Every Decision

The top four metrics guiding compliance investment (cost of compliance, cost of violations, revenue at risk, and revenue opportunities) are all financial, each cited by ~40-50% of respondents.
Efficiency gains like “time to compliance” matter but are secondary.
Executives now view compliance as a financial performance lever, not just a cost center.

Scale Brings Distinct, Size-Dependent Struggles

Large enterprises (>$10B revenue) face a “complexity tax”: coordinating compliance across multiple products, geographies, and teams raises task difficulty by 8-14% above average.
Mid-market firms ($500M–$999M) confront tough go/no-go decisions on market participation when new regulations hit, often under resource constraints and high political pressure.

“Our research supports what we’re hearing from customers and reveals more than the top industry pain points: it identifies where compliance can shift from a reactive obligation to a proactive driver of business value,” said Joe Skulski, CEO of Compliance & Risks. “The path forward is clear: address evidence gaps, link compliance initiatives directly to financial outcomes and tailor strategies to organizational scale. Compliance leaders who act on these insights will set the pace for their industry.”

Report Methodology and Demographics Overview

The findings presented in the Compliance & Risks report are derived from a comprehensive survey of 498 full-time directors, VPs/SVPs/EVPs, and C-Level executives. Respondents were drawn from compliance, legal, or risk departments within companies generating revenues of $500 million or more. All participating companies have headquarters in the U.S., United Kingdom, Germany, Denmark, Finland, Norway or Sweden, and actively conduct business in at least five countries. A significant percentage operate in 20 or more countries, underscoring the global reach and applicability of the insights. This robust demographic foundation ensures that the findings reflect the realities of complex, globally operating compliance operations.

About Compliance & Risks

Compliance & Risks empowers global enterprises to unlock market access and confidently navigate regulatory complexity. With a 20-year legacy in regulatory intelligence, we help beloved global brands manage product and corporate sustainability obligations, transforming compliance into a force multiplier for enterprise growth. More information at www.complianceandrisks.com.

Contact:
Kevin Wolf
kevin@tgprllc.com

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.