Achieving a coordinated approach to compliance in a global business
| Pages | 219-223 |
| DOI | https://doi.org/10.1108/eb024971 |
| Date | 01 March 1998 |
| Published date | 01 March 1998 |
| Author | Matthew King |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 6 Number 3
Achieving a coordinated approach to
compliance in a global business
Matthew King
Received (in revised form): 24th February, 1998
HSBC Holdings plc, 10 Lower Thames Street, London EC3R 6AE;
tel:
0171 260 0500; fax: 0171 260 7226.
Matthew King is currently Head of Group
Compliance to HSBC Holdings plc and
Midland Bank plc. He has previously held
positions in the HSBC Group in the Hong
Kong SAR, Australia and the United States
of America. The HSBC Group employs
more than 130,000 staff in over
5,500
offices in 79 countries and territories.
ABSTRACT
Organising a
compliance
function in a widely-
diverse
group such as HSBC appears
a
formid-
able
challenge.
This paper
describes
some of
the
more
basic
steps taken within HSBC to achieve
a coordinated approach, both in terms of the
structure of
the compliance
function and
the
fra-
mework within which compliance officers are
expected to operate.
INTRODUCTION
It is not difficult nowadays to demonstrate
the need for a coordinated approach to
compliance by any firm with global aspira-
tions,
though it is perhaps surprising that
there has been widespread acceptance of
this need only comparatively recently.
After all, as long ago as the mid-1980s sev-
eral main board directors of National
Westminster Bank were targeted by the
Blue Arrow affair, largely as a consequence
of the failure by the board to enforce
common standards throughout the Nat-
West group. Additional impetus has now
been provided by the debate on corporate
governance standards, and has now been
further reinforced by UK regulatory pro-
posals to hold individual managers person-
ally accountable for failures in internal
controls. Indeed, it is interesting to note
that the latest Financial Services Authority
(FSA) draft proposals would impose a
higher burden than Cadbury, requiring
managers 'to ensure the effectiveness' of
internal controls, while Cadbury merely
requires their effectiveness to be 'reviewed'.
Even this standard is to be watered down if
the recommendations of the Hempel Com-
mittee are accepted.
This is not, of course, simply a UK phe-
nomenon. The US Federal Organisational
Sentencing Guidelines provide a strong
incentive for companies to introduce a
coordinated compliance programme, given
the mitigation available under those Guide-
lines to companies which have implemen-
ted 'effective programmes to prevent and
detect violations of law'.
At the same time any system which is
concerned solely with protecting the top
level of senior management is doomed to
fail.
The system must also deliver construc-
tive and expert support to local manage-
ment who themselves have a responsibility
to comply. Success depends on ensuring
that the approach caters for the needs of all
levels of management.
This paper is concerned with the steps
taken by the compliance function in the
Journal of Financial Regulation
and Compliance, Vol. 6, No. 3,
1993, pp. 219-223
© Henry Stewart Publications,
1358-1988
Page 219
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