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Survival of the Fittest:

Compliance Program Evolution

Ten Pillars of Good

Compliance Design

As all compliance programs continuously evolve, how do you measure your success or plan for the next step in the development of your program? This video introduces a practical approach to assessing the current maturity of your program and processes using a compliance program maturity model. This model is designed to help you track and communicate your current state as well as pinpoint the places where your program can level up including governance, risk, process, culture, and design.


Ann Oglanian

Ann Oglanian has more than 25 years’ experience in the investment management industry and is sought after for her practical guidance on strategic business planning, organizational and operational matters, and compliance program development and assessment. Prior to founding ReGroup in 2002, Ann served as managing director, general counsel, and chief compliance officer of Montgomery Asset Management and partner in the investment management practice of Vedder Price.

 You can download a full copy of the slides from this webinar.

 

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Full transcript available below

What is the compliance design? I want to ... if you click to the next slide, I want to just go over how we think of this. We've look at a zillion firms. Big firms, trillion dollar firms, billion dollar firms. We've created 10 pillars of good design that we believe need to be in play. I don't need to go over these in a lot of detail with you, but the 1 through 5 is on this page.

Culture and leadership, you know, the compliance program has to be credible and independent, and this quality leadership messaging which means your CEO is messaging around the program that promote an ethical conduct. We want to see that as a pillar of good design. If we don't see that, then that pillar can be real weakness for your firm, but at the exact same time, policies and procedures might be outstanding. Written procedures that accurately reflect key leader requirements, accurately reflect actual practices designed to mitigate, identify conflicts of interest, and they're modified over time to reflect change. You could be a 10 out of 10 on that and have some culture and leadership weakness. The good news about that is you can identify and correct the weakness. Part of what these pillar are doing is helping you suss out and measure, if I were to say on a scale of 1 to 5, "Where am I?" on each one of these, we could, again, pinning the tail on the donkey, "How do I evaluate each of these 10 pillars?" It should then tell you, "I have some work to do", or "I have real strength here."

One of the things that is so helpful to executives is when you say to them, like they can understand this. When you start talking about the details of, you know, best execution, and you know, marketing review, they kind of glaze over a little bit, but this they understand. There's only 10 things they're ever going to need to really know, and we want to evaluate where we are so that we know where we need to improve so that when you ask for the resource to improve something they understand what you're talking about which [inaudible 00:12:26].

The next page has the other 5. I think. Yeah, reporting, do you have your reporting going on? We find that things kind of get sometimes swept into the compliance department and no information comes, excuse me, and comes back up. The way we know that is the CEO will say, "I know they're doing things, but I don't really know what they're doing." I'll think, "More reporting to the CEO might be in good order." Even if it's very simple. Escalation. Are issues getting escalated and resolved? We often see issues that sort of have been identified but unresolved for years. They're like, "We want to see that moving through a system of decision making." Record management, resourcing, managing change, these are our 10 pillars. I'm going to talk about a couple of them today as we can't go through all of them all today. Can you go to the next slide? Excuse me.

The next idea is how do we ... That's one tool is the 10 pillars. You can change those pillars however you want to. What are the things you believe should be measured? We believe that these 10 pillars are pretty tried and true, but your firm may be different, or if there's ones you don't understand, set them aside, work on the ones that you do.

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