Both the CBA and Westpac risk self-assessment reports identified their organisation structure as an important part of their risk culture problem which contributed to their AML/CTF compliance breaches.
By organisation structure I mean the co-ordination (or lack of co-ordination) of “silos” which developed around business divisions and their failure to identify and assess risk which affects the organisation as a whole.
Typically an organisation chart is divided into columns for sales, marketing, customer support, finance, and other functions, and product managers develop and maintain new products.
These levels of hierarchy can create compartmentalisation and disconnect in an organisation.
A lack of leadership for some functions also creates a sense of disorganisation.
The faster an organisation grows, and the larger an organisation, there is more risk of non-compliance through poor communication.
The major functions of a business need to be synchronised so everyone understands what is happening and what they should work on.
Typically Sales and Finance work together on one calendar, while Products and Marketing work together on another calendar.
But they should still be co-ordinated to create a single operating program for the company.
Key milestones and events in each of these systems create opportunities for companywide communication and collaboration.
Key dates include financial reporting, the AGM, compliance reporting, and the introduction of new laws and regulations affecting products.
A simple co-ordinating system will create a framework for everything compliance-related happening inside of the company.
Here are some key dates for 2020-2021 changes that need to be co-ordinated.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
