NEW YORK–Among industry sectors, insurers are at the forefront in meeting new requirements for public disclosure and transparency, according to a consulting firm expert.

That assessment came from Dennis Chesley, a partner in Pricewaterhouse Coopers' Financial Services Advisory practice in New York, who was interviewed at a Media Roundtable here.

Among industries, he said, “you have leaders and laggards, and insurance has a strong perspective on this, perhaps because risk is the nature of the business.”

Mr. Chesley, whose focus is performance and operational risk management, said firms have lately been picking up the pace coordinating their governance risk and compliance (GRC) activities.

According to Mr. Chesley's figures, large firms are spending $200 million to $500 million a year on regulatory compliance and operational risk management.

He said governance risk and compliance has become increasingly complex, with demands for operational transparency from a variety of angles, including “regulators, board members and investors and other stakeholders.”

In the past, he said the model for handling such requirements has been that each time there is a new demand, a new group has been created to deal with it.

Companies, noted Mr. Chesley, have created special groups to deal with various items. For example, he said, the financial accounting and disclosure requirements of the 2002 Sarbanes-Oxley Act led to a SOX group, and privacy laws have led to a privacy group.

These groups, he said, identify and assess risk and remediation efforts, as well as monitor the environment and report back to management.

Mr. Chesley said the problem has been that companies, in dealing with governance risk and compliance issues, have tended to “grab a bunch of people and say 'go solve it.'”

The need, he explained, is to get out of the “lost in the risk” framework and get information to the right people in the company at the right time.

Many large global financial services companies want to manage governance and compliance issues effectively, he said.

He noted that in order to handle these problems, companies are outsourcing their efforts and “pushing away from high-cost U.S.-based resources.

Chief risk officers, said Mr. Chesley, are consolidating to fund target areas.

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