Corporate compliance programs are no longer classified as “nice to have,” nor are they mere responses to allegations of wrongdoing. Some companies are going beyond mentioning how they have cleared their names with regulators after an investigation; they’re actively promoting the components of an effective strategy.
And this practice could become the norm.
Kim Manchester is managing director of ManchesterCF Consulting Co. in Toronto. He told the FCPA Blog: “A regional bank in the United States wanted further information from my company’s financial crime risk management training division for their wholesale banking division.”
Wait, that’s not unusual.
“Well, what is interesting here is that they intend to advertise the implementation of such an internal training program to their corporate client base, since adopting tight standards on anti-money laundering is a point of pride to them,” Manchester said.
“They want to distinguish themselves from their major international competitors,” he said, “many of whom have been fined hundreds of millions of dollars for failures in their AML compliance program.”
Have we moved so far from whining about compliance obligations to touting them as a profit generator?
That’s right, according to Professor John (Jack) Allan James at Pace University’s Lubin School of Business.
“Those of us in compliance suspected that audit, legal and risk needed to be at the table during discussions. But we finally understand that the HR and PR teams need to be there as well, getting the word out to the public that the company cares about risk management,” Allan said.
“They need to show they are training employees and monitoring their vendors. It’s not just about reporting fines and penalties any longer – or it should not be,” he said.
The increased role and prestige of compliance and risk professionals took decades to come to fruition, and problems remain in many institutions that have not caught on to the profit-generating aspects of effective risk management.
But the tide is shifting. Public relations managers might just be the new communicators of corporate compliance best practices to a receptive, investor audience.
Julie DiMauro is the executive editor of FCPA Blog. She can be reached here.