When was the last time you thought about the sustainability and reputation of your AFSL?
The vast majority of businesses have the right intention and do the right thing. They attempt to put the right structures in place to ensure they are meeting their obligations.
We typically see challenges arise when business models become more complex, for example, a business grows from a simple operating model to a corporatised model with multiple advisers and service offerings. This is further complicated by having operations in multiple geographic locations.
As businesses grow, their ability to control or streamline processes and operations becomes more difficult. What we do with our clients, is work with the business owner and Responsible Manager to help them create a governance framework that will support the continued growth of the business, while ensuring risks are managed appropriately.
An area where we focus on with our client’s is changing the perception of compliance and embedding a ‘compliance culture’; shifting the notion of compliance as an obligation, or something that ‘has to be done’, to creating an opportunity to enhance the business’ value through a robust compliance framework.
Three steps to shift the obligation to the opportunity:
- Get a commitment from the leadership team so they lead by example. Leadership needs to come from the top and be reinforced at every level. If people see the demonstration of values from the top, they are much more likely to follow, as this sets the benchmark for the organisation.
- Acknowledge that compliance and more broadly, risk management is not someone else’s job. While every business needs resources dedicated to the maintenance of compliance obligations and keeping abreast of regulatory change, everyone needs to take ownership and imbed a compliance culture in their operating model.
- Create best practice standards and ensure that everyone understands what must be done to meet these. From there, processes will need to be created to continually test these standards to ensure they meet best practice in the future.
The outcome from these three steps will have a clear link to the sustainability and reputation of your business, your advisers and your licensee.
So how committed is your business to maintaining a compliance culture?
Adam McGuren is the national manager of Licensee Select.
