Compliance functions as strategic partners in the new regulatory world
How regulated firms (re-)structure their Compliance functions to respond to, or preferably pre-empt, these complex challenges will encompass the range of culture, strategy and people. Not only the function’s composition, but also its role and voice within the business and overall risk management framework, should be considered.
Although it is difficult to quantify the value added by Compliance, fines and censure can highlight the potential cost of non-compliance. The number of regulatory disciplinary cases initiated by the FSA has increased over recent years – 66% in 2011 v 58% in 2010. In 2010/11 the FSA also issued a record level of fines – £98.5m. Over more recent months, substantial fines have also been levied by the FSA on firms for large-scale failures in controls and oversight. These statistics point towards increased regulatory expectations on firms.
An effective Compliance function is key to identifying and mitigating risk and protecting the business from regulatory censure and protecting brand and reputation.
Leading firms will see these external changes as an opportunity to enhance the value-adding aspects of Compliance. Seeing the potential, but also recognising the limitations, in their Compliance functions will help them in the pursuit of growth as well as dealing with threats, creating competitive advantage and improving corporate value and reputation in line with growing stakeholder demands around integrity, accountability and financial stability.
Loading...