Commentary: Credit Suisse, Silicon Valley Bank, FTX are reminders that risk and compliance shouldn’t be seen as a chore


Employees with a compliance mindset may not have much impact if the problems start at the top.

Enron had the values it extolled – integrity, communication, respect and excellence – painted on the company’s walls and highlighted in annual reports, but the leadership team still fooled regulators with fake holdings and unethical accounting practices.

With FTX, it was a case of lack of governance. There was no board to question the controls as Bankman-Fried treated the company as his “personal fiefdom” and gave free reign to his inner circle.

But these are ultimately extreme examples. They should tell us that for most companies, the approach to compliance needs to move away from the idea that it is simply a matter of preventing fraud.

Instead, it must be aimed at integrity management – honouring individuals’ moral, ethical and spiritual values which are key elements for proper functioning of organisations. The responsibility of managing risk and compliance is not just on a person or a division. It is about doing the right thing. Throughout entire organisations, everyone must be trained and educated on what the right thing to do is, and how to react when something goes awry.

The post-pandemic operating environment will throw organisations novel challenges and require changing mindsets and robust corporate governance.

To deal with this, companies will need to re-evaluate and build a culture of compliance that corresponds with the demands of innovation, employees, regulators and the community. Those who recognise the importance of this will have first-mover advantage.

Julia Chin is the Head of Compliance at Hugosave, a local savings app.

Source link

Tags: No tags

Add a Comment

Your email address will not be published. Required fields are marked *