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25th September 2017
:: Trustee | Compliance - Where do you stop?

Compliance – Where do you stop?
 
I’m OK, I’m compliant – I check the rules / I have a compliance department / I outsource my compliance to experts but is it good enough?  
Compliance rules by their very nature are to some degree set retrospectively, and there is logic in this idea, because we learn from experience. There are potential problems however, when rules created now shape the action you should have taken in the past. 
 
What you can do is to try to stay one step ahead: don’t just comply with the rules - exceed the requirements.
Why should I? It’s time consuming enough keeping up as it is.
You must of course set aside time to regulate and test your own compliance activities, whether you manage this in-house or outsource it. Whichever you choose, you take the ultimate responsibility.
 
Striving to meet the standard is not good enough: you need to strive to excel.
 
This is an excerpt from Patrick Dixon's book Building a Better Business. It deals with compliance, and it is so relevant to anyone involved in the pensions arena that we asked the publisher for permission to reproduce it here:
 
 
Compliance is dead as a defensive strategy
 In every board of large corporations there is one word which comes up time and again: compliance. Are we keeping to all the rules?
But compliance as a defensive strategy is dead. Not just slightly dead – totally dead. Just keeping to all the regulations can destroy a corporation. We need to go further than compliance demands. As Clive Mather, CEO of Shell Canada, explains; ‘Meticulous compliance with all the new regulations is a must, but it is not enough. We have to try harder; we have to set the highest standards in everything we do, because trust is essential in our business. In every sense, it is our business.’
 
You can comply with every law, keep to the exact requirements of every regulation, conform to every guideline and still hit major trouble because rules and regulations keep changing in response to every new scandal or public concern. And when they do, you can be sure that you will be judged not by whether you kept to the rules of 2003 during that year, but by whether what you did then looks ‘right’ now. You may defend yourself by saying that everything you did was within the law. But what happens when the world moves on?
 
It may seem unfair to judge past actions by today’s attitudes, but that is exactly what happens. In every business today you can find illegal activities that used to be approved of. Take insider trading, where an individual makes a killing on the stock market because he or she stumbled on internal secret information, shortly to be announced, that would soon alter share prices. A few years ago such trading was considered normal, clever business. Today it could put you in prison. There are numerous other examples of yesterday’s wise actions having become today’s folly.’
Reproduced by kind permission of Profile Books Ltd.
 
Building a Better Business by Patrick Dixon is published by Profile Books Ltd http://www.profilebooks.com/ and is available from Amazon.
 
 
 
 
 
 
 

 

 
 
 

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