If Companies want to retain and support their compliance staff, then Boards and Companies need to find ways to improve their compliance culture.
This is particularly important if the Isle of Man Financial Services Authority brings in Civil Penalties as Jersey has recently done.
That is the view of our team at Impact Professional Services, where we provide pragmatic support to increasingly frazzled compliance teams in small to medium Isle of Man businesses.
We are ever more aware that MLRO’s and compliance staff generally feel un-supported at board level. That boards see compliance as both an expense and a prevention to business growth.
Which is pushing talented compliance officers to leave.
What Will a Change in the Isle of Man Civil Penalty Regime Mean for Companies?
The role of the MLRO is in danger of becoming the role that no one wants. Boards need to be aware of this and be proactive in improving compliance culture for the benefit of all.
If Civil Penalties do come to the Isle of Man, Boards should understand what can be put in place to protect employees, which may include:
- Reviewing existing policies and frameworks
- Reviewing existing insurance policies
- Understanding the level of personal reputational risk.
We looked in more detail at this topic in our recent blog – What’s Down the Road for the MLRO.
Why not have a Health Check?
Would it not be a relief to go into your regulatory assessments feeling confident that your business is well prepared and in a state of good regulatory health? Through our health checks, this is possible. They allow you and your compliance team the ability to be proactive around your policies, systems and frameworks rather than reactive following regulator feedback or scrutiny.
Regulatory compliance today is an increasingly complex task. This is particularly true if your business is multi-jurisdictional and you have varying compliance requirements to contend with. Without regular maintenance, time and resources, your compliance function will degrade.
The demands from regulators and the risk of enforcement action are also increasing. The penalties for compliance failures are becoming increasingly common and detrimental– not only through financial penalties but also from a reputational standpoint.
All of these aspects come together to pose vital questions for companies.
- Is your compliance framework up to scratch?
- Could improvements be made?
- Is your company adhering to licence and regulatory requirements?
- If not, why not?
In the world today, ignorance is no excuse. Not knowing whether your systems are adequate in the eyes of the regulators puts your company’s future in jeopardy. It is not enough to hold your hands up and say you didn’t know that a problem existed.
It is essential that you not only have the right policies, procedures and frameworks in place, but that they are implemented and practiced effectively. This is a time-consuming, burdensome and complex task and as a result, operators often do not have the time or resources to undertake it themselves.
With all this in mind, we provide regular, ongoing assurance to management teams and Boards, through the provision of our highly regarded regulatory health checks.
A health check is about reassurance as much as it is about insurance. It provides comfort to the business’s internal and external stakeholders and management teams that the business is operating in good health in respect of key regulatory and licence responsibilities.
How are Isle of Man Money Laundering Reporting Officers Feeling Right Now?
We attend the MLRO forum, which has been set up to support MLROs in the Isle of Man. Trends we are seeing are:
- Increasing concerns around the effectiveness of Corporate Governance at Senior Management level
- MLROs who feel undervalued and not listened to
- Increasingly that compliance culture isn’t right throughout a company
- MLROs increasingly stressed out.
Boards have to wake up. For the sake of individual reputations, company reputation and the reputation of the Isle of Man as a great place to do business.
What can Companies Do to Retain MLROs?
Monitoring staff wellbeing is key.
The mere mention of Civil Penalties coming in is scary, especially for those fairly new to the role.
MLROs need to be listened to and valued. The time for paying lip service and simply ticking boxes is over.
If you feel you need to provide extra support short or long term to your MLRO/Compliance team then please contact the team at Impact Professional Services on 01624 820601.
How Likely is it that the IOMFSA will bring Discretionary Civil Penalties in?
There is a consultation live currently which we urge you all to complete. The closing date is the 24th June 2022, don’t miss out. The purpose of the consultation is to obtain views and evidence in relation to the making of regulations in respect of discretionary civil penalties on entities regulated under the Insurance Act 2008. The consultation is relevant to all authorised insurers, permit holders, registered insurance managers and registered insurance intermediaries.
You can have your say here.
We at Impact Professional Services feel Discretionary Civil Penalties are an inevitable progression unfortunately, particularly as Jersey have recently introduced it.
It’s imperative that pragmatic support is there for all concerned.
An independent Health Check provides peace of mind for Board Members and Compliance Officers alike.
Improving compliance culture will empower Compliance professional at all levels to keep companies safe, protecting reputations all round.
Don’t put this off any more – it’s too important. Book your free complimentary consultation with Impact today – it’s an hour very much worth your time.
