corruption and compliance asia 2013 - hong kong
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Corruption and Compliance Asia Congress 2013
25th June 2013
Presented bySam Gibbins
Director, International Compliance Association
Closing the Gap between Culture and Compliance
through Localisation
Morals and work ethic
“How do we behave when we think nobody is looking?’’
Compliance Culture starts at…
Chatswood Consulting Ltdwww.chatswood.co.nz
… the top.
Often one key component is overlooked…
Kirk O. HansonMay 2008
Singapore Law WatchJune 14th 2013
‘Some of the biggest SGX listed companies still giving scant
details or none at all’
The organisation needs to open lines of both horizontal and vertical communication
The compliance culture, programme and your staff
Every firm has a (general) culture, which drives• The way power flows• The way people, especially management, communicate• The risk appetite• The way things are done• The energy (and resource) levels applied
Cultures are pervasive, and exist across the firm
Shaping your firm’s Compliance culture and its compliance programme
• To develop an appropriate compliance culture• To provide training• To provide consultancy to the Business Units• To implement, monitor and report on standards of
compliance• To interface between the firm and its regulators
Typical contents of a Compliance Function Terms of Reference
It is also important to remember that in different
jurisdictions you are at a different ‘Starting Point’…
…therefore one cannot assume everyone already
has an ingrained understanding of culture
and ethical values.
The GuardianJanuary 4th 2013
Otto Bruderer, a managing partner of the bank, told a New York court:
"Wegelin was aware that this conduct was wrong… From about 2002 through
to about 2010, Wegelin agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the IRS.”
securitymanagement.com April 27th 2012
•‘Morgan Stanley maintained significant internal controls designed to prevent such corruption’
•The policies were updated regularly and employees were trained in FCPA compliance
•Records showed that Morgan Stanley trained Peterson on the FCPA seven times during the time frame of the fraud and reminded him of FCPA rules 35 times
Is it possible to measure the Integrity and Ethics of an individual, or even of an organisation?
In April 2013, the CISI became the first professional body to require candidates taking customer facing entry level examinations for wholesale/capital markets financial services activities to pass an integrity test.
Wholesale/capital markets practitioners in the UK now need to complete IntegrityMatters test, and pass with an A or B grade, prior to taking their CISI exams
Localisation is crucial to spread a coherent and relevant message to
your staff.
Wearesocial.orgDecember 7th 2012
Firstmonday.orgMay 6th 2013
Training should take the form of a risk based approach.
- who?- what?- where?- why?- how?
Should everyone be doing the same training?
70:20:10
70% on the job tasks, experiences and problem solving
10% structured training
20% feedback, working around problems relating to need
There are some limitations to this model; measurements, record keeping, suitability, career exposure, previous training,
to name but a few.
E-learning v Face to Face Training?
Key Compliance Framework Issues
• Ultimate responsibility for compliance rests with senior management
• The compliance function is developed and used by senior management as a critical tool, complementing other key risk management functions such as internal audit
• The compliance function is independent but sufficiently close to business operations to be effective
Key Compliance Framework Issues
• The compliance function is instrumental in embedding a strong compliance culture throughout the organisation
• The compliance function ensures ongoing compliance with regulatory requirements or at least is capable of timely remedial action
www.morecarrot.comJuly 19th 2012
It’s official: establishing a culture of compliance in the workplace – and communicating it clearly – can help you
earn a get out-of-jail card in the courtroom.
• There is no ‘one size fits all’ solution• Firms need to assess what they need, and how
best to achieve this• This can vary to a large extent from one
location to another• What is best for your competitor may not be
best for you• There is no perfect answer!
Conclusion
- END -My thanks to you all for listening
and, where applicable, staying awake
