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21st Annual GRC Conference 2017- Day One

Friday 13 October 2017

Day one of the GRC 2017 Conference challenged members to not only think about what they can take back to their organisations but also asked them to try imagine how they would implement the things they earned in a couple weeks’ time.
 
Holly Ransom, CEO of Emergent explored the tensions of changing work force and resultant shifting trust structures.
 
As millennials begin to dominate the work force, businesses need to look at how they interact.
 
This means that for organisations need start with the ‘why’ of what they are doing rather than the ‘what’.
 
 Ransom said that the ‘why’ matters because it triggers the part of the brain that drives human behaviour and motivation.
 
“So when you are trying to get someone worked this way, to all of a sudden,  turnaround and go that direction you need to make sure that the they can touch, see and feel the why, ”
 she explained.
 
She also focussed on the realisation that there isn’t a one size fit all approach and the way one may perceive their brand may not be the same way that those external to the organisation may perceive them.
 
The next session was a media panel chaired by Danny John from Society One, his two guests were Ben Butler from the Australian and Nassim Khadim from the Business Day. This media panel explored the role media played in regulation.
 
The panel challenged the form of transparency that currently happens  between industry and the regulators but excluded the public.
 
The media panel did not believe that regulators as being position to do enough penalise industry enough.
 
“If this much pressure has resulted in some little tweaks and changes then imagine a royal commission, let’s not forget they have incredibly significant powers to bring out whatever they want.” Khadim said.
 
She said that this shouldn’t’ just be sold as being better  for the consumers but it is better change for everyone.
 
Butler identified what he called lack of corporate memory in corporate Australia.
 
He gave the example of invoice financing which he described as one of the riskiest forms of lending.
 
 

The Regulators
After morning tea there was five member regulatory which spoke about their enforcement priorities and what would be changing in their organizations, and to certain extent, what they would be expecting from industry.
 
The regulatory representatives were Peter Kell, Deputy Chair for the Australian Securities and Investments Commission (ASIC), Deli Rickard, Deputy Chair from the Australian Competition and Consumer Commission (ACCC), Andrew Mills who is the Second Commissioner from the Australian Tax Office (ATO), Rachel Challis from the Australian Transaction Report and Analysis Centre (AUSTRAC) and Fahmi Hosain Head of Governance, Culture and Remuneration at Australian Prudential Regulation Authority (APRA).
 
Kell addressed the addressed their corporate plan for 2017 and the key challenges which focussed on conduct, building financial capability, digital disruption and cyber resilience, globalisation, and structural and demographic change.
 
Kell’s presentation focussed on two issues with focus on conduct, culture and compliance.
 
  • The relationship between culture and compliance.
  • The second issue that he focussed on was transparency around data and industry performance metrics
 
He said that there is negative perception of financial services because too often there must be a scandal before behaviours change.
 
And he challenged the audience by asking:
 
“what are doing to not only address the challenges and compliance issues within your firm but across our industry? Do you have anything like this in your business, your sector, where you know there Is a problem but everyone else is doing it, are you prepared to sort of collective problem and drive the necessary change?
 
He addressed the significant reform process under way to give ASIC greater powers and to dole out more penalties.
 
Delia Rickard from the ACCC talked about the role of competition and consumer regulator and some of the challenges. Her presentation had a focus on product safety compliance because this where the competition regulator issuing a lot challenges in this space.
 
Rickard talked about the regulators role as an education function reminding organisations about their obligations and if the education fails then they would focus on regulation.
 
She addressed the Productivity Commissions on data, and looked at the impact of the Harper Review and talked about s46 to tackle the misuse of market power.
 
“So that it would prohibit not just something that has the purpose, but also something has the effect of substantially lessening competition which would bring us into line with the competition legislation.”
 
Rickard also told attendees that the review of the Australian Consumer Law (ACL) has been completed.
 
“One of those is the recommendation to increase the penalties under the ACL o tha they are comparable with competition law,” she explained.
 
 
Andrew Mills from the ATO said that tax is one of the things that business should be managing as part of their corporate governance.
 
“For tax, risk management is not only about showing compliance with the law but also opportunities that are overlooked.”
 
The essential argument that Mills wanted his listeners to grasp is  that having that strong GRC framework is nothing if it is just ‘shelf-ware’ and stressed the importance of having ‘lived’ framework.
 
He addressed that the question of tackling risk framework and maintaining public trust is not just a question for industry but also a question for regulators like the ATO who must ensure that they have strong and effective ‘lived’ framework.
 
Rachel Challis made a call to arms from Austrac. Challis reminded the audience that the regulation, like the AML/CTF Act is there to protect the Australian financial system.
 
She also addressed the regulator’s changing relationship with industry and their attempt to move away from that adversarial relationship to a more collaborative relationship.
 
“AML is risk-based regime, so what we really want to see from you is a demonstrated understanding of how you are going to go about mitigating and understanding money laundering and terrorism financing risk.”
 
She said that the regulator needs to see how this sits with the business, but emphasised that all this does need to proportionate.
 
 
She did stress that because of the news AML is high in the view in many businesses.
 
“My challenge to you is that you have a window and if don’t have sufficient tension, resources or line open in your business …now is the time to ask because people are listening.” She stressed that this should go beyond technical compliance.
 
Fahmi Hosain form APRA focussed on the work that they are doing in the remuneration.
 
“For prudential regulators around the world, remuneration is actually a relatively new feature of regulation.”
 
Hosain emphasised that the ‘key planks’ and requirements for remuneration start at the board level.
 
He said that it is clear to the regulator that remuneration is a critical factor that will have impact on decisions, and this is something that the attendants of the GRC 2017 should understand.
 
Hosain then emphasised the point made by Holly Ransom earlier that day, about trying to understand the audience that you are trying communicate with and influence.

 

The Changing Profession
 
In the later sessions, Jane Couchman, Executive General Manager of Compliance at CBA.

looking at the future of the audacious GRC professional, and how she has could apply her previous experience in anthropology into the understanding and influencing organisational culture. She also looked at the importance of developing a strong frontline.
 
Couchman focussed on what she defined as the opportunities and challenges that she saw throughout the financial services industry and even in other industries.
 
And asking the question ‘what is the new role for governance risk and compliance professionals? This is question looks at prioritisation.
 
Couchman focused on the ever-changing expectations of GRC professionals, the interactions and the types of interactions that are being had with boards and executives.
 
The role that culture and conduct and culture programs in organisations and the impact on the wider compliance programs.
 
The changing nature of appetite for non-financial exposures.
 
And one the issues that has been a mainstay of the GRC Conference over the years, which is the question of ownership and accountability for risk across organisations.
 
 Doug Trout, president of Price Metrix, looked at the role that effective data analytics can play in dispelling the myths and misconceptions.
 
“[Data] samples are dead. We don’t sample anymore; we analyse it all. And we don’t do it once a year, you schedule a branch exam. We analyse it all, all the time.”
 
This shift that Trout is referring places emphasis on prevention and the ability for data to be able to see what the human eye might miss.
 
The final session for the day was with Paul Fitton from m Aurecon group looking at the the importance of having an effective crisis management process.
 
One of the of the challenges with crisis management was because is a crisis can be compared to the 5 stages of grief.
 
Fitton indicated that it was only after they reached the final stage of grief, which is the acceptance then can take some steps to mitigating the damage that would have been done by the crisis.
 
The first day ended on festive note with dinner and the award ceremony
 


Our awardees for this year:
 
Lifetime Member Award -Graham Caddies
 
Honorary Fellow Award- Penni James
 
Risk Management Professional Year of the Award- Patty Therrios
 
David Squire Memorial Associate Student of the Year Award- Michelle El Khoury
 
CCRP Student of the Year Award- Valarie King