THE REPUTATION AND COMPLIANCE DYNAMIC
It takes 20 years to build a reputation and 5 minutes to ruin it” Warren Buffett once said, succinctly alluding to the notion that although intangible, a good reputation is an extremely valuable asset, requiring careful cultivation and maintenance.
In a corporate world still recovering from the fallout from the global financial crisis, companies that have retained a solid reputation can continue to operate with largely unquestioned integrity, while others less fortunate in this regard must work hard to repair damaged relationships, build bridges and re-establish confidence. Moreover, when setting out to build, or rebuild, reputation, companies should not underestimate the increasing role that compliance standards have to play, especially since compliance departments generally report directly to the upper echelons.
Underscoring this contention is a December 2016 report by the Aite Group – ‘Trade Surveillance and Compliance Culture: Moving on Up’ – which found that 68 percent of compliance professionals at financial firms worldwide believe that upholding the firm’s reputation is the primary objective of the compliance function. “While a regulatory fine is one of the most tangible and quantifiable results of a failure in the compliance process, firms overwhelmingly agree that protecting reputation is the actual core function of the compliance department,” says Danielle Tierney, a senior analyst at the Aite Group.
Apr-Jun 2017 Issue