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Unit 8 - Corporate Governance,
creating a Compliance culture &
benefits of Compliance
- CG & effective compliance
- Common themes
- TOR for committees & levels
of responsibilities
- Effective systems &
controls
- Clearly documented
policies and
procedures
- Senior mgmt
responsibility
- Effective
flow of MI
- TOR for committees & levels
of responsibilities
- The credit crisis exposed
short comings in the
Governance and risk mgmt
of firms
- The link between Compliance,
corporate Governance , ethics and
corporate social responsibility is clear in
light of the recent economic crisis and
fundermental loses of consumer
confidence. The aim for a financial
services firm must be to go beyond
purely cosmetic compliant exercises
- Problems were
one of ethics,
culture, greed,
morality
- The link between Compliance,
corporate Governance , ethics and
corporate social responsibility is clear in
light of the recent economic crisis and
fundermental loses of consumer
confidence. The aim for a financial
services firm must be to go beyond
purely cosmetic compliant exercises
- KEY COMPONENTS OF GOOD
CORP GOVN STRUCTURE
- RESPONSIBILITY &
ACCOUNTABILITY
- Clearly defined
for decision
making
- adhoc system for
urgent decisions
- adhoc system for
urgent decisions
- BOARD
accountable
- Clearly defined
for decision
making
- TRANSPARENCY
- CG structure and TORs of
committees should be
communicated and minutes
taken and made available as
required
- First agenda item to
review previous actions
- First agenda item to
review previous actions
- CG structure and TORs of
committees should be
communicated and minutes
taken and made available as
required
- RELATIONSHIPS
- How each committee within
the framework interacts and
how interested stakeholders
are represented within this
- How each committee within
the framework interacts and
how interested stakeholders
are represented within this
- STAKEHOLDERS
- clearly
identified and
their interested
represented
- clearly
identified and
their interested
represented
- PROCESSES
- All processes within the Corp
Govn framework must be clearly
documented , version controlled
and kept up to dat
- All processes within the Corp
Govn framework must be clearly
documented , version controlled
and kept up to dat
- STRUCTURE
- Access to appropriate
committees and the
Board dependent upon
the needs of the
stakeholder
- Access to appropriate
committees and the
Board dependent upon
the needs of the
stakeholder
- Education & training
- Everyone is responsible for
Compliance
- Everyone is responsible for
Compliance
- RESPONSIBILITY &
ACCOUNTABILITY
- DEFINITION: CORPORATE GOVERNANCE IS THE
SYSTEM BY WHICH FIRMS ARE DIRECTED AND
CONTROLLED
- Probably the most important system within a
firm to achieve long term success . Getting it right
can give sustainable competitive advantage.
- Good sound corporate governance
leads to a better and well run
company
- effective compliance envirnoment=
the introduction and maintenance
of systems and procedures *
nurturing of a healthy internal
attitude towards the benefits of
compliance throughout the firm as
a whole
- Demonstrating the benefits is hard as they can be
intangible.It is therefore necessary for compliance
professionals to be able to promote to benefits of
compliance at all levels within a business
- For example, where the regulator decides not to
take further action following the notification of a
breach (as a result of the good relationship and
high degree of confidence that the firm will put
things right) - or negative ones, such as
highlighting where other firms have fallen foul of
the regulations and the consequences of this
- For example, where the regulator decides not to
take further action following the notification of a
breach (as a result of the good relationship and
high degree of confidence that the firm will put
things right) - or negative ones, such as
highlighting where other firms have fallen foul of
the regulations and the consequences of this
- Demonstrating the benefits is hard as they can be
intangible.It is therefore necessary for compliance
professionals to be able to promote to benefits of
compliance at all levels within a business
- CMP dept is now often
given the role of
managing corp govn
framework
- CMP can demonstrate how it can add value, as it
will have greater access to decision making
process. CMP function has a very significant role
- CMP can demonstrate how it can add value, as it
will have greater access to decision making
process. CMP function has a very significant role
- Corp Governance
is fundamentally 'DECISION
MAKING'
- 4R's - RIGHT INFO
- RIGHT PEOPLE -
RIGHT TIME _
RIGHT DECISION
- All of these will
improve the probability
of making the right
decision
- Decisions made in
committees/board
should aid in
achievement of firms
stratgic ojectives and
corp values.
- Decisions made in
committees/board
should aid in
achievement of firms
stratgic ojectives and
corp values.
- All of these will
improve the probability
of making the right
decision
- RISK MGMT
- 4R's - RIGHT INFO
- RIGHT PEOPLE -
RIGHT TIME _
RIGHT DECISION
- effective compliance envirnoment=
the introduction and maintenance
of systems and procedures *
nurturing of a healthy internal
attitude towards the benefits of
compliance throughout the firm as
a whole
- Good sound corporate governance
leads to a better and well run
company
- Key sources
reference/regulation
- UK
- UK Corporate Governance codes
published by Financial reporting
council (FRC) 2003 updated 2012
- Walker Review 2009 - credit crunch
- Has influenced
UK corp govern of
financial
services
industry
- NEDs (now approved
persons) to challenge
board which had not been
happening. Banks were
running themselves.
- NEDs (now approved
persons) to challenge
board which had not been
happening. Banks were
running themselves.
- Has influenced
UK corp govern of
financial
services
industry
- Principle on Corp
Governance 2004 being
reviewed by OECD
- FCA & PRA SYSC
section of
handbook.
applicable to all
regulated firms.
- cadbury report 1992
- UK Corporate Governance codes
published by Financial reporting
council (FRC) 2003 updated 2012
- Europe/US
- Sabines Oxley ACT 2002 -
Enron
- Sabines Oxley ACT 2002 -
Enron
- UK
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