The Future for Compliance – Best Practice and Delivering Value
Managing the regulatory relationship
Central to managing the regulatory risk that an organisation faces, the Compliance Department, perhaps unsurprisingly, has a key role to play in managing the relationship between the firm and the regulator. However, Compliance has a far greater contribution and involvement than perhaps many Compliance professionals would realise.
For instance, if the relationship between the business and the regulator is allowed to exist/continue solely at a transactional (rather than relational) level then it will be almost inevitable that the business will be reactive to the regulator. Once there, breaking out of the continual circle of keeping apace with regulatory change, responding to regulators’ requests, meeting the stated commitment, etc. becomes a not insignificant challenge. Furthermore if it is the business rather than Compliance that owns the regulatory relationship, then there will be little opportunity to influence the senior management, the organisation and indeed the regulator.
Leading Compliance Departments not only own and manage their business’ regulatory relationships – with the implicit message that that sends to senior management – but also pro-actively manage their agenda/relationship in step with the regulator, almost as synchronised swimmers or ballroom partners. With any dynamic relationship, this must be constantly adjusted and fined tuned.
However, if a Compliance Department already knows where its regulator stands on a particular business development, then that Compliance Department is well placed to act as a trusted adviser to the business.