The Compliance Revolution: How Compliance Needs to Change to Survive

Part TwoPractice

What to Do Differently

Compliance needs to develop new approaches, philosophies, and techniques in practice so that it can:

• Keep pace with regulatory progress.
• Face forthcoming global challenges.

But also compliance needs to develop a momentum and agenda of its own towards more values-led, strategic, and judgment-based practice. This will allow compliance to both add and receive greater value.

In terms of the General Model, the next step is a development of regulation and compliance from stage 3 to stages 4 and 5. The changes involved are numerous and complex, but we have separated out five key elements:

Stage 4:

1. 1. Ethics
2. 2. Culture and conduct risk
3. 3. Good governance

Stage 5:

1. 4. Sustainable Outcomes
2. 5. Community^*

Evolution of Regulatory Focus

Having started with a focus on process, regulation moves in stage 4 to consider the causes of problems, and subsequently in stage 5 to consider the outcomes of regulatory intervention as an additional pull factor. The natural extension of an outcome focus is to consider the impact of firms on the wider community (a possible stage 6).

Regulation in stages 4 to 6 is delving into corporate internal workings in a more fundamentally interventionist way; together the combination of all these approaches provides a much stronger, more robust framework for maturing corporate behaviour and delivering a healthy financial ...