Download - Consistent Decision Making
CLEAR 2008 Annual Conference
Anchorage, Alaska
Consistent Decision Making
Robert ChambersAssetRisk Advisory Inc.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Meaning of Consistency
Consistent with other decisions
Consistent with strategyConsistency
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Importance of Consistency
• Strategy implementation
• Effectiveness
• Fairness
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Judgment
• This presentation is concerned with decisions where judgment (or discretion) is required.
• Not all decisions by a regulator require judgment.
• The goal is to guide administrative discretion.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Major Causes of Inconsistency
• Insufficient focus on what is important.
• Silos that exist within the regulator.
• Ineffective and out-of-date processes.
• Inadequate training.
• Overconfident licensee committees (self regulation).
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Indicators of Inconsistency
• Unpredictable outcomes.
• Overturned decisions.
• Allegations of unfairness.
• Non-transparent processes.
• Excessive criticism by the media.
• Tolerance of the ‘likeable rogue’.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Top-Down Implementation
Prioritize RisksMonitor Decision Making
Determine Responsibility
for Control
Articulate Statutory
Objectives
Develop Tools to Guide Decision
Making
Assess Risks to Objectives
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Intended Outcomes
The definition of intended outcomes requires thought and planning before processes are designed to guide decision making.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Tools that Aid Consistency
• Testing using control groups.
• Risk prioritization worksheets.
• Case assessment worksheets.
• Decision trees.
• Sound, documented processes.
• Training.
• Case management systems.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Modeling
• Lack of reliable historical data is a problem in developing decision trees that rely on algorithms.
• ‘Washing’ of historical data can be cost prohibitive and sometimes impossible if all relevant information was not collected originally.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Ongoing Monitoring
• Management oversight by capable professionals who have bought into the process.
• Periodic independent reviews of process and outcomes.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Case Study
• The concern.
• The response.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Corporate Finance
Market Regulation
Executive
Chief Accountant
Self-Regulatory Organizations
CSA, NASAA
Risk Analysis
Risk Prioritization
Alternatives for Risk Control
New Rule
Compliance
EnforcementAction
Guidance
Investor Education
Issuer Education
Registrant Education
Regulator Strategy
Implementation
Evaluation
Case – Regulatory Focus
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Case – Prioritization of Risks
1. Sample worksheet tool ‘A’.
2. Determine responsibility for control.
3. Likelihood.
4. Impact.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Case – Complaint Assessment
1. Sample worksheet tool ‘B’.
2. Evaluate every complaint/referral for regulatory significance.
3. Factors – plus and minus.
4. Quantitative vs. non-quantitative analysis.
5. Assess priority and resource allocation.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Conclusion
Once consistency has been achieved within regulators, the next goal will be increasing consistency among regulators.
CLEAR 2008 Annual ConferenceAnchorage, Alaska
Contact
Robert Chambers, LL.B., CPA, FCA
AssetRisk Advisory Inc.
1402-30 Wellington Street East
Toronto, Canada M5E 1S3
Direct (416) 304-0068
