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The Compliance Revolution: How Compliance Needs to Change to Survive



The Compliance Revolution: How Compliance Needs to Change to Survive

David Jackman

ISBN: 978-1-119-02061-5 July 2015 300 Pages

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The Compliance Revolution—Practical, Powerful Changes for Strategic Organizational Value

Compliance is absolutely critical in creating a robust and resilient organization, one which is trusted by clients and contributes to market stability. Firms must approach compliance differently in order to meet these standards. Written for compliance staff, regulatory organizations, and senior management, The Compliance Revolution explains how key changes in compliance affect underlying principles, practices, roles, expectations and values. This valuable resource for global practitioners assists in navigating compliance requirements and implementing solid protection for a sound organization.

Author David Jackman presents a coherent model for understanding and applying key developments in regulation and compliance. While the model is based on financial services, it can be applied to any sector and industry. It identifies five critical compliance components: Start-up, crises, expansion, sustainability, and outcomes-led focus.

You will also discover:

  • Why compliance is worth spending money on
  • What your firm could and should be doing differently
  • The importance of ethics in compliance and regulatory challenges
  • How to create a pro-compliance culture
  • Ten principles of good governance and why good governance matters
  • How to employ judgment-based compliance
  • The features and benefits of corporate maturity

The Compliance Revolution is a crucial asset for all those with stakes in compliance—board members, compliance managers, and employees. David Jackman outlines key compliance challenges and reveals the practical tools and techniques required for successful practice. The insight, examples, and strategies in this comprehensive guidebook will help you and your organization achieve increasingly efficient, substantially more effective compliance procedures and practices.

Preface xi

Acknowledgments xiii

About the Author xv


CHAPTER 1 New Compliance 3

The Challenge 3

Turning Point 4

Traditional Compliance 4

New Compliance 5

Shared Journey 5

CHAPTER 2 General Model of Regulatory and Compliance Development 7

Introduction to Development Models 7

General Model of Regulatory and Compliance Development 8

International Comparisons 11

Example of the UK 11

Using Regulatory Toolkits 13

Conclusion 14

Endnote 14

CHAPTER 3 Is Compliance Worth the Money? 15

An Unfortunate Unconformity 15

The 2008 Global Financial Crisis 16

Legacy of Failure 18

Post-2008 19

Increasing Compliance Spend 22

A Line in the Sand 22

Future Challenges 24

Conclusion 24

Endnotes 25

PART TWO Practice

CHAPTER 4 Ethics 29

Definitions 29

Ethics in Regulation and Compliance 29

An Ethical Framework for Financial Services 30

Ethics in Business 31

How Should a Compliance Practitioner Approach Ethics? 32

Ethics at Work versus Ethics at Home 33

Steps Towards Developing Ethics 33

Main Tools for Identifying and Applying Corporate Ethics 35

Three Critical Steps in Establishing Ethics 35

Ethics in Regulation 56

Principles and Ethics 57

Advantages and Disadvantages of Principles 58

Principles-Based Regulation 60

Conclusion 65

Endnotes 66

CHAPTER 5 Culture 67

Pro-Compliance Culture 68

What Is Culture? 69

What Is a Values-Led Mind-Set? 69

Changing and Embedding Culture 70

How to Change Culture 74

Creating Crucibles in Regulation—Examples 77

Regulatory Methodologies 80

UK Indicators 83

Fair Dealing in Singapore 88

Measuring Culture 89

Conclusion 93

Endnotes 93

CHAPTER 6 Good Governance 95

Why Does Governance Matter? 96

What Is Corporate Governance? 97

A Model of Good Governance 101

Ten Principles of Good Governance 102

Conclusion 131

Review: The State of Corporate Governance 131

Endnotes 138

CHAPTER 7 Outcomes 139

Why Is This Step Up So Significant? 139

What Is Outcome? 141

Why Is Outcome So Important? 142

Development Matrix 147

Outcomes in Singapore Regulation 149

Outcomes and Enforcement 150

Conclusion 151

Endnotes 152


CHAPTER 8 Community 155

Importance of Community 156

Role of Companies 156

Social Usefulness of Banks 158

Role of Compliance 159

Definition of Community 160

Community Principles 161

Sustainable Communities Principles—What Do They Mean? 162

Development Matrix 164

Corporate Social Responsibility 167

New Reporting Standards 167

Behavioural Economics 168

Vulnerable Consumers 171

Conclusion 174

Endnotes 174

CHAPTER 9 Corporate Faith 175

What Is Corporate Faith? 176

Managing Corporate Faith 177

The Value of Corporate Faith 177

Dimensions of Corporate Faith 179

How Faith Develops 183

Corporate Faith into Practice 184

Professionalism 184

Judgment-Based Compliance 186

Conclusion 186

CHAPTER 10 Corporate Maturity 187

What Is Maturity? 187

Maturity and a Direction of Travel 189

Unconditionality 194

The Underlying Process 195

Corporate Maturity Framework 197

Cavitation 198

Connecting the Five Stages of Development with the Five

Levels of Maturity 199

Conclusion 199

Index 201