The SEC plans a concept release “soon” that could modernize audit committee disclosures for the first time in years, including touchy subjects like naming the audit engagement partner. Expect awkward questions to follow about how audit firms are hired and perform the work they do. “This foreshadows what I would consider to be increasing amounts of fiduciary and statutory obligations coming the audit committee’s way,” says Mark Cheffers of Audit Analytics.
If compliance officers needed another reminder that the FCPA’s books-and-records provisions are still a dangerous trap for global businesses, look no further than the SEC’s recent $25 million fine against BHP Billiton. Observers say it offers valuable lessons in the SEC’s expansive interpretation of the law. “A check-the-box compliance approach of forms over substance is not enough to comply with the FCPA,” said Antonia Chion, an enforcement attorney at the SEC. Details inside.
Congress is back in session, which means another round of political bickering over reform of the Dodd-Frank Act. Alas, Compliance Week Editor Matt Kelly says, the law is already working as one would expect—that is, a little bit effectively, and a little bit stupidly. Compliance officers should not hold their breaths waiting for relief, and the public shouldn’t hope for much either. More of his thoughts inside.
More than ever before, managing compliance risk now requires a framework that unifies decentralized compliance activities. The goal: to streamline monitoring, testing, and reporting. That may sound difficult in theory—and, well, it’s difficult in practice too. Inside we have tales from Coca-Cola and Kimberly-Clark on how they try to integrate compliance efforts, through maps, charts, and e-books, personal outreach, and any other trick that works.
Compliance and HR have been tussling for years over which function owns company culture, when the truth is both have a crucial role to play. “If HR and compliance could come together and realize and accept that they’re on the same team … it could be a really powerful alliance,” says Carrie Penman of NAVEX Global. Inside, we look at ways to foster cooperation between compliance and HR.
What are the top threats to the U.S. financial system? In a new report, the Financial Stability Oversight Council cites cyber-security, financial innovations, and high-frequency trading among the problems regulators must address. Critics fret, however, that the agency wants “to get rid of the capital markets and replace everything with bank-like regulation”—which, they say, is a serious risk unto itself. More inside.
Compliance and ethics training needs to move beyond the standard training video and PC-based testing. While online tests are an adequate exercise in rote memorization, experts say the future of effective training means understanding the unique psychologies of the workforce and managers, customizing your messages, and shaping training objectives around risk assessments and the concerns of internal audit.
The high drama of this year’s proxy season happened in May, when DuPont thwarted a boardroom takeover pushed by hedge fund guru Nelson Peltz and his Trian Partners fund. How? This week, columnists Stephen Davis and Jon Lukomnik critique the basic strategy Trian used and the counter-offensive DuPont skillfully employed to convince investors that, no, wholesale governance change wasn’t necessary.