In a climate of regulatory change, where wavering trust has financial services businesses feeling like battleships being tossed upon raging waters, the importance of compliance cannot be underestimated. It’s imperative that you have the right leadership in place and that it’s following the right path – the fate of your organisation depends on it.
Not that long ago, in a galaxy not so far away, some unscrupulous financial services businesses put profits before people. But times have changed. The Royal Commission struck back, dodgy practices were exposed and now an era of new hope has begun. An age in which strong compliance and practical risk management will secure victory for licensees. And with it will rise a new leader – the responsible manager.
Harnessing the force
In every organisation, there exists an invisible force, which drives behaviours and actions. It is culture and it permeates through all aspects of a business.
In the right hands, this force can be harnessed for good. Leaders who foster a customer-centric approach to their compliance culture and will bring accountability, capability and strength into their organisation. The right culture will encourage your employees to adopt industry best practice and focus on outcome-driven behaviours.
However, there is also a dark side to the force. For the ego-driven, the dark side promises enormous wealth and power. But it comes at a cost. A toxic culture, which places greed ahead of fairness, ultimately leads to negligence, misconduct and business failure.
In order to survive the battle for business supremacy, attract leaders who can harness the force for good, not evil. Who can instil an ethical culture and guide your business safely through the asteroids of risk and defiance.
These leaders are responsible managers.
Bringing balance to financial services forces
As a force for good, responsible managers must have a voice at the table. They must be listened to. Their insights and recommendations are an energy source that powers how a licensee meets its legislated obligation to provide the financial services covered by its licence efficiently, honestly and fairly.
Responsible managers should:
both understand their role and responsibilities and be supported by their organisation
ensure that the licensee’s representatives are adequately trained and are competent to provide the financial services under its AFS Licence.
keep up to date with the ever-evolving business and regulatory environment so they remain ever-ready to carry out their role
stay alert and undertake regular surveillance of the business to make sure it is managing operational and conduct risks.
When these threats emerge, the responsible manager must be equipped with enough power to know what to do. They must do, or do not. There is no try.
Mind what you have learned. Save you it can
Responsible managers are not born overnight. They must possess both the required knowledge and skills, perfected over many years through training and experience.
A responsible manager needs to:
have a thorough understanding of how their organisation operates and who has oversight of its various aspects
engage with employees at different levels and across business units to stay across both the big picture and small details that could pose operational and conduct risks
communicate information effectively to build understanding, respect and trust
undertake adequate CPD so they continue to be fit and proper people to influence the provision of the relevant financial services.
It is only once the responsible manager has mastered the skills and experience needed for the licensee to provide the financial services which ASIC has authorised it to provide, that they can fulfil their destiny. And remember, it’s a team effort; a lightsaber is a useless tool if the person wielding it can’t draw enough collective energy and faith to power it.
Ignore the importance of this role in your business, and fail it will.
It’s time to take a stand against the old ways and for new heroes to rise. Support your responsible managers and they will guide you to good business for all.
Originally published February 5, 2020, updated April 22, 2020