To meet regulatory expectations firms must have a number of policy and rules in place, as well as manage conduct risk and monitor conflicts of interest effectively. In recent years, regulators have been stressing concerns on the ability of firms to manage conduct risk and highlighting that conduct is directly driven by the organization’s ethical culture.
But why are regulators emphasizing culture as part of the firm’s responsibility to avoid misconduct? The simple answer is - an organization’s ethical culture determines whether its rules and procedures will be followed, ignored, or circumvented.
Regulators want firms to implement best practices to build a culture that focuses on ethical behaviour, accountability and meets regulatory criteria. Also, organizations need to seek employees with a high ethical standard, particularly when looking at the management team. Managers can set the wrong tone for the firm leading to conduct risk across all levels of the business.
Both regulators, the SEC and FCA expressly talk about individuals responsibility, not only about encouraging senior managers to take accountability for their actions but also be responsible for indirect behaviour that contributes to a laissez-faire culture.
If you find the topic interesting, join MCO and the Mizen Group specialists Patrick Kelly, President & CEO, Deepa Keswani, Director & Compliance Advisory for a discussion on the regulatory focus on culture and how you can measure culture in your firm. The agenda includes:
- The Importance of Compliance Culture
- US Regulatory Expectations
- What is Culture?
- Characteristics of a Healthy Compliance Culture
- Identifying Healthy Culture
- Measuring Culture to Obtain Outcomes
- Compliance Culture Survey
- Key Takeaways
- Q&A Session
The Mizen Group Inc, a Compliance Advisory and RegTech Services business, uses diagnostics and technology to quickly assess, remediate and validate all aspects of compliance programs. To surmount challenges faced in today’s regulatory environment, we have developed innovative proprietary tools that help clients conduct in-depth explorations of their compliance programs and determine gaps, inefficiencies and areas for improvement. These tools may be utilized to address regulatory obligations for financial institutions including banks, insurance companies, broker-dealers and third-party service providers.
Mizen’s diagnostic platform also provides an on-line measurement and management tool, allowing clients to more easily track and manage compliance processes, reduce complications, mitigate issues and streamline the workload related to compliance activities and regulatory challenges.