Private Equity Administrators (PEA) provides you with a download on the 2015 Compliance Trends Survey

In a joint effort between Deloitte and Compliance Weekly, the survey aims to gauge the industries’ views on 4 broad compliance categories:

  • resourcing the compliance department
  • responsibilities and activities of the compliance operation
  • compliance risks within the extended organisation; and
  • the use of technology.

 

The results of the survey have provided answers to the following questions:

  • Do compliance executives have the appropriate authority and resources to do their jobs?
  • Are compliance executives assessing the right risks in the right way?
  • How do compliance executives use technology to tame the challenges they face?

Increasingly Chief Compliance Officers (CCOs) are reporting directly to either the CEO or the Board, while this figure stood at 57% of the 364 respondents, it clearly shows the importance of allowing CCOs the opportunity to provide an important contribution to corporate strategy, values and culture of the business they are responsible for.

When building a strong, transparent, risk free culture CCOs must feel incorporated as a business partner across the entire organisation. Without this important contribution to the board, companies are limiting themselves from having a clear and full understanding of the importance their compliance function plays in the ongoing stability of their firms. How many boards can therefore say they possess the necessary understanding and skill set to question the compliance team and understand the full ramifications of their responses?

Building resources and their reporting lines is certainly an increasing area of concern for today’s CCO. 44% of respondents didn’t have designated compliance officers in their subsidiaries, business units or geographic markets. Those that do, have their reporting lines mixed between global CCOs and local senior managers. The question then raised is the independence of the compliance function, where officers report directly into business executives. Importantly there lies a risk of information dropping between the gaps, and failing to reach those in decision making roles. In worse cases scenarios one has to ask how on earth remote compliance functions can possibly oversee business and client activities on a daily basis.

It is however, reassuring to hear that 82% undertook an annual compliance risk assessment, but not everyone had been measuring the effectiveness of their compliance programs with simple metrics such as hotline calls and internal audit findings. Senior management buy-in and feedback is also an essential part of the evolving risk assessment.

So where do we sit with the tools available to CCOs to assist them in performing their reporting and responsibilities? Regulation changes, companies bolster their staffing to manage new administrative requirements and lastly the technology catches up. CCOs constantly have to work with increasingly larger data sets in order to perform their roles. As data sets become more granular it raises the question of the alignment between IT strategy and a CCOs needs. How many CCOs have to patch data sets together from different systems, or reach out to the business personnel to perform data aggregation functions where the accuracy and consistency of the data collected may be overlooked?

PEA has always insisted their head of compliance sits on the board of their company, who regularly reviews and employs additional resources to support their needs. Most importantly we align our data needs to our annual IT strategy so we continue to perform highly efficient accurate and timely reporting to our clients, regulators and investors.

We would be very happy to share how we have structured our compliance team, feel free to call James in Guernsey or Peter in Denmark if you would be interested in hearing more:

Guernsey:

James Orrick, Managing Director

+44 1481 730988 jo@peadm.com

Denmark:

Peter Toyberg, CEO

+45 70 20 40 61 pt@peadm.com

Further reading:

Deloitte & Compliance Week 2015 Compliance Trends Survey

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