by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
GRC Professional : GRC Summer 2013
26 GRC Professional • Summer 2013 COMMENT Action and consequence: the key to effective governance, risk and compliance WHETHER WE LIKE IT OR NOT, AS the saying goes, we live in interesting times. The original adage, often referred to as the Chinese curse, is supposed to be the first of three curses of increasing severity. The second curse is: "May you come to the attention of those in authority". While there is no proof that either of these two curses is even Chinese in origin, they perfectly fit the bill for the financial services industry in 2013. In recent months, we have heard media commentators calling for an overhaul of governance, risk and compliance (GRC) frameworks and practices in the wake of the Libor-rigging a nd HSBC money laundering and terrorism financing scandals. These are calls for overhaul of a regime that never had a hope of working from the beginning. The first question to ask ourselves at this time is why a GRC framework was ever required in the first place. The second question is why anyone thinks that GRC could function as the frontline to prevent illegality within financial institutions. The answers to these questions define whether it is an overhaul or a rethink. GRC as a framework arose within financial institutions because in the past some of the people who worked in these businesses held the laws and regulations that applied to their activities in contempt. There are many definitions of the purpose of corporate gover nance within the world of GRC At the nub of corporate governance and GRC seems to be the human propensity for 'doing bad'. and the one that seems to be best on point relates to the moral and natural purpose of corporate governance. This consists of assuring, on behalf of those affected, a worthy pattern of good while avoiding an undesirable pattern of bad. The ideal outcome would assure a perfect pattern of good with no bad. It seems a natural law that, when the laws and regulations interfere with the main game of profit making and taking, the laws and regulations seem to get left behind. They are unplaced in the race, they rarely 'medal'. At the nub of corporate governance and GRC seems to be the human propensity for 'doing bad'. This is pa rticularly true when the profits available are generous, and no penalties or consequences seem to flow from taking them in priority to other obligations such as compliance with laws and regulations. There seems to be contempt within some institutions over their obligations to comply with laws and regulations. Does this contempt arise from a m a ssive disconnection between the potential rewards and risks of penalties for misconduct in the financial services sector? It seems a law of the financial world that when the laws and regulations interfere with the main game of profit making and taking, the latter often prevails. This propen sity in the fina ncial sector for 'doing bad' is without contention. There have been many examples in the past decade alone -- most recently, BY JOY GEARY Anti-money laundering expert Joy Geary puts the blowtorch on GRC frameworks in financial institutions and asks whether they need an overhaul or a rethink.
GRC Spring 2012
GRC Autumn 2013