Finance companies and banks should ignore criticism over large pay cheques and concentrate on ensuring their managers work within the regulations. That’s according to Complinet – a leading provider of compliance and regulation information.
The company says the business community has to move on from arguments over who earns what and address the real issue – proper compliance.
Complinet claims it has evidence the majority of senior managers have learned their lesson from the current global financial meltdown and are now taking compliance more seriously.
Complinet says financial reward should now reflect that change in attitude. This advice comes after the Chairman of the FSA, Lord Turner warned MPs the city was in danger of returning to ‘business as usual’ with overblown bonuses.
However, a survey by Complinet suggests Lord Turner is missing the point in the battle to bring credibility back to the financial services sector. This survey provides a fascinating insight into how the post-crash financial world is viewing compliance.
The company questioned more than 150 senior compliance officers from leading financial institutions in the UK and the US and found the current recession had been a ‘shock to the system’.
It also found the majority of senior executives were now paying attention to the rules and were keen to be far more involved in the compliance process and a new culture of compliance was being established with 88 per cent of respondents believing they now ‘had the ear of senior management’.
“The real challenge is not worrying about levels of executive pay,” says Chris Pilling, CEO of Complinet.
“What the industry has to work out is how its institutions connect executive behaviour to what they earn – not just what they can add to the bottom line.
“In order to break the cycle which has led to the recession, financial institutions need to reward correct behaviour in executives. Their bonuses and salaries should be linked to the products they sell and the goals they achieve, providing these products are compliant.”
“Bonuses are essential in any business to attract and retain the highest possible calibre of staff. However bonuses also need to reward and incentivise those people who embrace the values of transparency and fairness.”
The survey also showed:
87% thought they now had the resources to build a compliance culture in the firm
70% said the compliance had come out of the background and was influencing business decisions
63% felt that compliance issues had become more essential in their organisation
66% said their companies were taking compliance more seriously in the ‘post crash’ world
