Compliance Strategy and Performance
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Compliance Strategy and Performance
- 1. Live Webinar February 10, 2016 A SPECIAL WEBCAST FROM ETHISPHERE AND COMPLIANCE STRATEGY AND PERFORMANCE
- 2. © 2015. All Rights Reserved | 2 SPEAKERS Patrick Quinlan CEO Convercent Erica Salmon Byrne Executive Vice President, Compliance & Governance Services Ethisphere Agenda Key Data & Benchmarks to leverage Emerging Best Practices to adopt Predictions for 2016 to keep a close eye on
- 3. © 2015. All Rights Reserved | 3 INFLUENCE & STRATEGY
- 4. © 2015. All Rights Reserved | 4 Budgets and visibility trending upwards
- 5. © 2015. All Rights Reserved | 5 TREND ALERT “ Whether the compliance officer reports to the general counsel or the CEO is not going to govern an analysis of whether the compliance function is working. What’s more important than where compliance is housed is the independence of the function, that the compliance officer has a ‘voice at the table’ and can be heard by the board.” —Andrew Weissmann Chief, Fraud Section – Criminal Division U.S. Department of Justice 16% of surveyed CCOs report to the CEO, compared to 36% of the World’s Most Ethical Companies.
- 6. © 2015. All Rights Reserved | 6 Compliance more informed, but not influential
- 7. © 2015. All Rights Reserved | 7 Risk assessments, not strategy, driving compliance priorities
- 8. © 2015. All Rights Reserved | 8 TREND ALERT “ Buyers splashed out $3.8 trillion on mergers and acquisitions in 2015, the highest amount ever.” 34% of employees at companies in M&A situations experienced retaliation—twice the rate as more stable workplaces. 27% increase in observed misconduct during M&A transitions
- 9. © 2015. All Rights Reserved | 9 DATA & METRICS
- 10. © 2015. All Rights Reserved | 10 Lack of data availability, access and centralization
- 11. © 2015. All Rights Reserved | 11 TREND ALERT “ Strong compliance must be data-driven. A good compliance officer should be able to rattle off a list [of the types of data they would monitor] off the top of their heads and their list will tell me the level of their sophistication as a compliance professional. Similarly, when I look at compliance programs, the kind of data that they do and do not monitor tells me a lot about how sophisticated their program is.” —Hui Chen Compliance Expert, Fraud Section Criminal Division U.S. Department of Justice
- 12. © 2015. All Rights Reserved | 12 Compliance drawing on other department data
- 13. © 2015. All Rights Reserved | 13 TREND ALERT “ Every piece of your program needs to actually be tied to the operations of your company. When you don’t tie those systems together, it’s very easy to ignore the other system that’s not necessary to make the transaction happen.” —Hui Chen Compliance Expert, Fraud Section Criminal Division U.S. Department of Justice
- 14. © 2015. All Rights Reserved | 14 ROI most desired—and elusive—metric
- 15. © 2015. All Rights Reserved | 15 TREND ALERT “ Companies have searched for reasonable metrics to assess how likely their employees are to follow their rules...But years into this quest, many compliance experts are no closer to agreeing what exactly a culture of compliance is or how to measure it.”
- 16. © 2015. All Rights Reserved | 16 PROGRAM REPORTING
- 17. © 2015. All Rights Reserved | 17 State of the program reports delivered at least annually
- 18. © 2015. All Rights Reserved | 18 Report frequency, content, format and audience vary
- 19. © 2015. All Rights Reserved | 19 TREND ALERT “ A firm’s culture is a key driver behind the behavior of those in it. In many cases, where things have gone wrong in a firm, a cultural issue is at the heart of the problem.” —UK Financial Conduct Authority Compliance Culture—A Timeline of Regulators’ Comments WSJ
- 20. © 2015. All Rights Reserved | 20 TREND ALERT “ The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, [CEO Conrad] Parker has resigned. In order for us to move forward as a company, we cannot seek to hide or downplay the problem. We must admit it and remediate it as soon as possible. —David Sacks CEO, Zenefits BusinessInsider
- 21. © 2015. All Rights Reserved | 21 Inconsistent Reporting Practices
- 22. © 2015. All Rights Reserved | 22 Q&A
Editor's Notes
- Research performed over 2015: 10 live roundtables across the U.S. Survey of nearly 100 compliance execs Multiple in-depth interviews, some of which were included in the survey
- 1/3 reported budgets are up. 1/5 reported budget decreases.
- 54% report to the GC/CLO However, among the World’s Most Ethical, only 25% report to GC. 60% report directly to the CEO or Board. CCOs that report to the CEO have greater access to, understanding of and influence on other business units’ responsibilities and goals
- Lacking comprehensive and advance knowledge of company strategic objectives, compliance turns to risk assessment results to drive priorities.
- 2015 was biggest year for M&A ever with $3.8 trillion in spending, projected to continue in 2016.
- CCOs comfortable with traditional metrics. Desired metrics include: Predictive analytics on employee behavior Tangible program ROI Analysis on open-door reports True effectiveness of compliance training
- Data most commonly shared via email and file transfer (spreadsheets)
- Excel most commonly used reporting tool