The overlap between HR, Compliance and ethics. Who will give a lead?

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The overlap between HR, Compliance and ethics.
Who will give a lead?
Caroline Britton
Authorised by the Financial Services Authority in
respect of regulated activities.
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What is ethics?

• when an investment banker starts talking
  about principles, he is usually also defending
  his interests, .. he rarely stakes out the
  moral high ground unless he believes there is
  gold under his campsite
• Michael Lewis - Liars Poker (1989)

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What is ethics?

• I regard internal and external audit as the
  guardians of the reputation of the firm.
• CEO 1992
• Reputational risk is the responsibility of
  every business unit leader.
• CEO 2002

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Examples and implications for HR

• Remuneration policies
• Promotion policies
• TE policies
• Discipline

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Remuneration policies

• Where bonuses/commissions are based on volumes of
  business, how does this influence behaviour?
• Where there is a direct link between business
  results and individual remuneration what impact
  does this have at year end?
• What is the impact of bonuses based on
  individual, desk or firm performance?

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Remuneration policies

• What are you remunerating - past or future
  performance?
• Bonus levels set by competitive forces

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TE policies

• The policy must be consistent and consistently
  applied
• Evidence and justification should always be
  required
• Identified breaches of the policy should be taken
  seriously

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Roles in ethical framework

• Senior management Determine reputational
• appetite - set the image
• of the business
• HR Draw up policies to meet
• the standards set
• Compliance Monitor integrity of
• individuals

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The final word..

• The range of acceptable conduct was wide
  indeed.you didnt worry too much about ethics.
  You were just trying to stay alive.

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