Responsible managers – a first line of defence worth investing in

Responsible managers – a first line of defence worth investing in

Posted by Kate Whiteley on Jan 25, 2019 11:34:35 AM
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Estimated read time: 2-3 minutes
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Topics: AFSL CPD | RG105 | Compliance Fundamentals | Improving culture and conduct in the workplace

In the wake of the Royal Commission and increased scrutiny of financial services on the part of regulators and customers alike, it should be a responsible manager’s time to shine.

But when an RM role is ‘tacked on’ to a full-time position, and not formally recorded in a job description or KPIs, and often not even remunerated for the increased responsibility, do they feel inclined to take the position seriously? Would you?

Enabling the RM role

The role is an important one, so organisations have a duty of care to help RMs to feel highly valued. So, how do we empower the RM role?

Remember that a responsible manager being nominated and fulfilling their duties is a key partner to a licensee meeting their licensing obligations.

You might recall that business magnate Warren Buffett said:

“It takes twenty years to build a reputation and five minutes to destroy it.”

Responsible managers as a first line of defence are worth investing in. We need to afford them personal power to do the role they need to do.

It should also be routinely communicated to the broader organisation that being a responsible manager is not a token occupation but a critical position to the company demonstrating and maintaining its compliance and effectiveness.

Support them both with recognition, training, support and perhaps a little extra $$.

Organisational considerations

It could be time for your business to revisit its responsible manager approach through some reflective questions:

  • Have we got appropriately trained, experienced people in the RM role(s)? Are they aware of the specific products and services they are overseeing?
  • Do they understand the business operationally and financial markets more broadly? Are they working in or meaningfully with the business, as ASIC does have some concerns about long-term use of external RMs?
  • Do they understand their role and responsibilities as an RM both when they’re nominated and ongoing? Do they understand that they are a driver of culture and conduct within an organisation?
  • Do your employees know who your RMs are? If you are a large organisation, do your RMs know who the other RMs are? Do they have regular meetings or catch-ups?
  • Show your wider organisation that you value the role. Who your RMs are and their achievements should be announced with pride, clearly positioned in your internal communications and company news. They need to be trained and appreciation of them shown through a specific CPD and development plan. Consider paying them extra for this important role, particularly if they have occupied it for a while.
  • You might consider asking your RM how they are going to approach this role. How are they going to make it work? Have them put a plan together and ask them what support they need from the organisation. Maybe they can provide a quarterly report to the board?
  • Do you have a succession plan? Never hurts to appoint a deputy or provisional RM and involve them in training and shadowing the RM functions. Replace RMs quickly. We have come across cases in organisations where they have not been replaced for months. This is a huge risk and sends the message internally that the business does not need one and does not value the role.


RM training must empower the individual to do what they need to.

Training considerations

A responsible manager needs to:

  • Understand role and responsibilities on both regulatory and practical terms
  • Be aware that how they approach their role drives the culture within the organisation
  • Recognise the wider economy and trends, including impacts of new technology
  • Analyse ASIC’s strategic priorities and identify cases where RM actions were implicated as a factor.

 

For smaller organisations, where in many instances the licensee is also the responsible manager or there may only be a handful of RMs, the organisational and training considerations are equally relevant and can be adjusted to suit their size and nature of business.

A responsible manager can be an entity’s superhero. It’s time we supported them to step up to the task admirably. It’s a first line of defence well worth investing in.


Related content

Improving culture and conduct in the workplace

Improving culture and conduct in the workplace  <https://www.financialeducation.com.au/product/improving-culture-and-conduct-in-the-workplace/>

Compliance Fundamentals

Compliance Fundamentals

AFSL CPD for Responsible Managers

AFSL CPD for Responsible Managers

 

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What makes an RM, an RM? Hint...it’s not just the title. Far from the sometime treatment as a ‘tacked-on’ role, responsible managers as a first line of defence are worth investing in.

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