13 Jun /13

The Compliance Manager: Our Misunderstood Friend

Compliance manager job“Every company is just one bad decision or one ‘bad employee’ away from scandal, one scandal away from a salacious headline, and one headline away from a flood of lawsuits.”
William Lytton

Like the referee, it may be the curse of the regulator not only to be unpopular, but to be noticed only in times of dispute and controversy. As general counsel of Tyco International, leaders in the field of fire safety and security, William Lytton was well placed to comment on the pitfalls awaiting companies that take their regulatory responsibilities lightly. EVS Translations works hand in glove with compliance professionals across all sectors, and we see the positive effects of their work. The Compliance Manager may not always be understood or appreciated among their colleagues, but like any good official their absence would be keenly noticed.

Last week’s HMRC consultation paper on strengthening the taxation code of practice for banks outlined a range of non-compliance risks in the UK financial services sector. Public disillusionment with banks may not always be justified, but the perception that leading institutions may be tax dodging is deeply unhealthy. The paper makes it clear that trust needs to be rebuilt, and invites banks “to build mutually open and transparent relationships”. Compliance with the code is voluntary, which on the surface may appear to be giving banks an easy ride. But one of the key provisions of a voluntary code of conduct is that non-compliant banks can be “named and shamed” with no statutory right of appeal. It will be within HMRC’s remit to judge banks on questionable one-off transactions, questionable patterns of behaviour or general poor governance. In each case, strong internal regulation can stop these issues escalating. The value of a diligent Compliance Manager could hardly be clearer.

Beyond the financial services sector, it’s becoming more and more common for forward thinking companies to implement compliance management systems. Britain’s statute book being dragged into the 21st century has certainly given them the motivation. Until recently British anti-corruption legislation was an unsatisfactory mish-mash of laws dating back to 1886. The Bribery Act, passed into law in July 2011, has brought clarity and discipline to the subject and is widely regarded as the most stringent anti-corruption legislation in the world. IT law is moving forward under the auspices of the EU, with European data protection reform about to bring the first significant changes since the advent of the internet. This is a good time to know the rules, and a very bad time to flout them.

The cost of compliance failure can be almost measureless. Potential loss of revenue, of credibility, even of personal liberty loom over companies and their key decision makers. And different rules for different countries can only add to the complexity and risk. When a Sony Playstation component was adjudged to contain too high a level of cadmium for regulators in the Netherlands, massive quantities of the product were reworked and replaced at a cost estimated by Sony to be 110 million Euros in sales and 52 million Euros in profit. A practice commonly followed in one country might be considered unethical or even criminal in another. EVS Translations is proud to support regulatory professionals who stay one step ahead of the game, saving their employers money and preserving their reputations every working day. Some rules really aren’t meant to be broken.