Many companies across Europe are bracing themselves for investigations by regulators after failing to enforce any regulatory risk management.

Some 40% of large European companies expect to be subject to an investigation within a year, research has shown. Yet 25% lack any procedures to deal with the experience.

A survey conducted by market research firm TNS for law firm DLA Piper studied 250 businesses in the UK, Germany, France, Italy and Spain. It found that while many businesses view regulatory risk management as important, they still fail to enforce it.

Yet avoiding the issue can lead to damaging investigations into areas such as corruption, price-fixing and accounting irregularities.

In addition, the surveyed businesses expected the number of investigations to increase. Some 57% of respondents thought that their industries could be looked into within a year, while a staggering 76% expected the risk of criminal penalties connected to regulatory violation to rise in the next five years.

Roy Tozer, a partner at DLA Piper, said: “Companies need to be able to manage and respond to domestic and EU regulation and, increasingly, the long-arm of the US authorities.

“However, our survey clearly shows that they are failing to put in place a comprehensive response to managing these risks. They are putting themselves in grave danger by failing to address these problems.”