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Questions compliance officers should ask themselves before that big promotion

In an SEC filing Tuesday, Zurich-based Credit Suisse Group SA said it wrote down $4.7 billion in bad loans, and chief risk and compliance officer Lara Warner was “stepping down” from her role on the executive board effective that day and leaving the bank.

The bad loans went to a family-held U.S. hedge fund called Archegos Capital Management and a UK supply-chain finance firm called Greensill Capital. Archegos collapsed and Greensill filed for insolvency.

Credit Suisse’s board of directors said it activated its “tactical crisis committee” and launched “two investigations, to be carried out by external parties, into the supply chain finance funds matter and into the significant U.S.-based hedge fund matter.”

Brian Chin, head of investment banking, will leave the bank at the end of April.

Chin and Warner aren’t accused of anything. And this post isn’t about who’s to blame at Credit Suisse or what anyone there did or didn’t do.

But Warner’s abrupt departure this week prompts a hypothetical question: If you’re offered a senior risk management and compliance job, how should you react?

Some background.

According to her now-deleted firm bio, Warner, 54, became chief risk officer of Credit Suisse Group in 2019, and in August 2020 added compliance to her title.

The dual Australian and American citizen joined the bank in 2002 and had been a member of the executive board since 2015.

She started in research, became CFO of investment banking in 2010, and CEO of that unit in 2013.

She moved into compliance and regulatory affairs for the parent company in 2015.

Until Tuesday, her resumé shows an apparent string of successes. Anyone would celebrate a similar corporate path.

But when a promotion or internal transfer means shifting from operations to compliance, there are questions to ask yourself:

  • Can I function as a corporate gatekeeper?
  • Will I have enough independence and skepticism to say no?
  • Can I stand apart from the C-suite when I need to?

When an insider — a team player for many years, let’s say — is offered a gatekeeper job, their work life has to change.

Corporate gatekeepers, if effective, aren’t popular. The veto they typically hold over the C-suite, and their alignment with regulators’ expectations, sets them apart. Strong gatekeepers are natural targets for resentment and opposition.

Some people can handle that. Others can’t.

Something went wrong at Credit Suisse, ending in Tuesday’s $4.7 billion hit. Did it have anything to do with Lara Warner’s performance as chief risk and compliance officer? I don’t know.

Still, anyone promoted out of operations and into risk management and compliance, especially to a top job, should ask themselves hard questions.

Asking before the promotion is so much better than waiting till after.

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