Winter Newsletter 2010
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Inside this issue:
People in profile:
Welcome to the second edition of our Newsletter
It is with a sigh of relief that we welcome the rapid rebound in demand for quality candidates against the backdrop of the gloom that was 2009 (See below for more commentary).While demand has improved rapidly there has been no significant upward pressure on compensation, indeed there is a still a slight overhang with employers seeking to capitalise on the healthy supply of quality candidates at bargain salaries.
Underpinning the surge in demand are a number of factors, including a round of catch-up after some employers pruned too hard, reorganisations, new busi-ness entrants, regulatory actions, new legislation such as the new AML regime, and a general awareness by senior management and boards that Risk Management in particular needs to be properly resourced. The pendulum has swung firmly in favour of risk management roles. A fair bellwether of market conditions is the professional firms which are now venturing back into the market after significant layoffs in 2009.
Combined with demand by ASIC which is reportedly seeking a significant number of compliance officers to take on its new market supervisory responsibilities, there is plenty of opportunities for smart young lawyers and accountants who would like to pursue a career as compliance professionals. As one of the few specialist agencies dedicated to compliance and risk management, we are pleased to see that employers are working around the dreaded “one size fits all” panel system that tends to benefit neither candidates nor clients. Finally we would like to endorse our friends at Complinet, Martin Money and Nathan Lynch. As one of the global leaders in compliance and risk market commentary, policy, training and recruiting services, Complinet has now firmly established its presence in Australia.
GFC: The worst appears to be over
After a turbulent 2009 there is a sense of relief and optimismas we come to the end of the first quarter in 2010. The early part of 2009 wascharacterised by an unprecedented drop in demand for compliance and risk professionals at all levels, with midtier and senior opportunities in particularly short supply. The last quarter of 2009 saw cautious signs of recovery, with some of the majors returning to the market to take early advantage of a wealth of well qualified candidates with realistic expectations. Following the usual holiday lull over Christmas and into late January the market really came alive in February and has been buoyant since then, although itis still a little patchy and yet to fully recover.
Key drivers for the change in sentiment appear to reflect the broad economic outlook for Australia and the recognition that Australian financial institutions fared reasonably well. While many cut hard into their compliance and risk teams, many bunkered down and are now reaping the rewards of loyalty in difficult times.
As always, good candidates are still in demand. If you are considering a career change give Greg or Barry a call to discuss your career options.
People in profile:
An Interview with Peter Whyntie,
Chairman of the Australian Compliance Institute
Do you see the world of compliance and risk management in Australia and internationally being substantially affected by the GFC?
There has been a significant increase in the focus on risk management resulting from the GFC, particularly in large financial services companies and many non-financial services companies. The role of CRO has been enlarged, and in many companies is now a direct report to the CEO. The budget for risk management has been significantly increased, with some companies now allocating very serious dollars to improving risk infrastructure such as software. This is driven by recognition of the need for the level of risk analysis to be lifted to enable more focused and informative reporting to management and boards.
We hear the terms “conflicts of interest” and “moral hazard” widely used in the press. It seems that these issues go to the heart of the GFC. What lessons can we learn from this breach of confidence?
In every boom we see examples of failure of ethics. Where governance is weak, and the risk culture poor, individuals either acting alone or in unison will take maximum advantage of that. I have lived through three major market busts. The difference between the failures of 2008-09 and those of 1987-88 was the level of sophistication. You could say the crooks today wear better suits! However apart from the more notable examples I believe culture and governance across the mainstream of our financial landscape stood up pretty well.
The convergence of risk and compliance has been happening for some time and more recently corporate governance has emerged as a key issue. Do you think that directors are aware of their regulatory duties and the importance of ompliance and risk management?
It is dangerous to generalise. However, the directors I have experience with are acutely aware of their duties. I have not seen a time where directors have given more time to addressing risk and compliance. It is my observation that directors tend to see compliance still in a more legalistic light than risk management. However, where management has advanced to providing integrated risk and compliance reporting directors welcome this and see risk and compliance as a vital part of that. It is also fair to say many directors are becoming critical of the degree to which the focus on compliance especially can distract from their duties to steer the strategy of the company. I see that pendulum swinging back some what as the economy improves.
The Australian regulatory regime has been praised as a model for the rest of the world, with a balance of prescription and outcome based compliance obligations. Do you expect any substantive changes to the current approach to regulation in Australia?
Clearly the Australian regulatory regime stood up well. At the recent ASIC Summer School a number of foreign regulators and commentators singled out this country as a good example. However, it was also noted that there as some luck too. A number of commentators have looked at the dampening effect of the Four Pillars policy on the ability of Australian bans to participate in some of the more extreme bank-ing practices. Whilst there are many voices call-ing for Australia to stand apart from the push towards global regulation, many are also arguing that as a participant in the global capital markets we cannot be exempt. I believe we will see a level of regulatory reform but that our government and regulators will exercise caution in how far we go.
At the end of the day compliance and risk management depend on a corporate culture that promotes honesty and integrity. How should boards go about ensuring that their corporate culture meets these basic ethical standards expected by society?
The most important thing is to lead from the top. When management see boards living their ethics, such as through rigorous board appoint-ment procedures, continuous education and open and transparent board performance as-sessment, good culture will blossom. The Turner Report, issued in the UK late last year, made strong recommendations around director independence, raising the quality of expertise and knowledge in boards, focusing on searching and fearless inquiry by directors of management proposals and reporting, and increasing the quality of risk reporting. The depth of knowledge and quality of inquiry I experience at a board today is light-years from where it was 30 years ago.
Website: http://www.compliance.org.au
Dr Stephen Cohen, Associate Professor at the University of NSW
Dr Stephen Cohen is an associate professor at the University of NSW, a director of the university’s Graduate Programs in Professional Ethics and a director of the Business Ethics Centre at Compliance Australia.
Aside from his academic work in ethics, moral reasoning, business and professional ethics, and philosophy of law, Stephen has over15 years’ experience in consulting widely to the public and private sectors, the professions, and peak bodies throughout Australia, including the Australian Compliance Institute, AFMA, the Financial Planning Association and IFSA.
Dr Stephen Cohen, Associate Professor at the University of NSW
His consulting work has involved such things as ethics training, development of codes of ethics, analysis of ethical and compliance sys-tems, corporate governance, development of ethical decision-making models, and social/values audits. Stephen has been sought after both for development of high-level and high-quality ethics awareness programs, and to help organisations fight ethical fires.
Stephen is currently completing a research project, “Ethical Excellence in the Public Sector of New South Wales”, which is jointly funded by the RTA, the NSW Department of Commerce, and the Australian Research Council.
His book, Business Ethics (Oxford University Press) is the most widely used business ethics text in Australian universities. The fourth edition of this text was published earlier this year. Stephen has published widely in the areas of applied ethics, business, professional, and public sector ethics, corporate governance, moral reasoning, and the philosophy of law.
He was recently named as the most productive business ethics scholar in Australia, and among the most pro-ductive in the world. He is sought after as a panellist and presenter at industry and public-sector conferences, as well as by the media in mat-ters concerning professional, public sector and business ethics.
Stephen also directs the Business Ethics Centre at Compliance Australia (www.compliance.com.au) and is available to assist private and public organisations or professional bodies to address issues around business ethics and corporate governance.
If you would like to speak to Stephen please give him a call on: 0421 064 708.
ETHICS IN PROFESSIONAL LIFE
Dates: 15th – 17th June 2010
Venue: University of Sydney
Applications: b.chaar@pharm.usyd.edu.au
For representatives of the professions this is an opportunity to meet and discuss ethical issues pertinent to their practice. It is about applied and professional ethics. Streams at the onference include moral philosophy and business ethics. Speakers include the world renowned Professor Peter Singer and Dr Simon Longstaff. Events of interest to those involved with compliance. risk management and business ethics.
ACI Risk 202:
Dates: 14 July, 2010
Venue: Sydney
Applications: 02-9290-1788
This one-day workshop is designed to develop your skills and provide you with a more in-depth understanding of corporate risk management. It focuses onthe practice of risk management from the high-level controls and board perspectiveto the operator developing and populating the risk register and managing risktreatment strategies.
About Compliance & Risk Management Recruitment
Compliance & Risk Management Recruitment (CRM) was established in 2004 to bring together the experience of our Directors, who between them have been involved as recruitment consultants and practitioners in compliance, risk management and audit for a combined period exceeding 40 years. CRM has evolved to become a leading specialist agency with an extensive network of clients and candidates in these fields, with a focus on both permanent and contract roles.
Sydney Office: (02) 9247 6655
Direct from International: +61+2+9247 6655
Address:
Compliance and Risk Management Recruitment
3 Spring Street
Sydney NSW Australia 2000
