swiss investigation forum insight financial crime


Swiss Investigation Forum 2018: Insight into investigations

Financial crime is evolving – so must those who seek to combat it

Crises and reputational issues strike more quickly than ever before. In recent years, managing investigations has become an even-more critical priority for organisations. At the Swiss Investigation Forum, investigation experts shared insights from the past and discussed how to prevent future disruption.

Corporate crises can range from spectacularly exploding oil platforms costing multiple fatalities, to bent back office bean counters stealthily siphoning off funds. But whatever the origins, all organisations have to be prepared amid rocketing global regulatory zeal, spiraling fines and intensifying public interest.

“The need for businesses to commit the appropriate time and resources to ensure that they are properly identifying their potential crisis risk areas, and developing plans to respond effectively should they be required to, is as urgent as ever”, says Nic Carrington, managing partner for financial advisory at Deloitte.

While Switzerland is small, it has had more than its fair share of corporate crises, because of its disproportionately large number of multinationals. Many have had their fingers burned, whether on cross border tax evasion (the private banks) or high-level corruption (a number of manufacturers), meaning they need to be prepared.

“There are lots of different ideas on how to be ready”, says Lisette van Eenennaam, deputy head of the office of special investigations and senior legal counsel integrity at pioneering technology leader ABB.

Kicking off this year’s Deloitte Swiss Investigation Forum in Zurich, she added:

“Obviously, you need an active code of conduct, clear rules on integrity and regular training.”

But few believe that is enough. Among the key messages conveyed by the five expert speakers to the audience of more than 130 sector professionals was the need to ensure staff did not just pay lip service to compliance. Equally as important, that rules observed at head office are just as sacrosanct in far-flung satellites around the world.

Another key take-away was the primacy of ensuring “the tone comes from the top” and bosses “walk the talk.”

Saumya Bhavsar, global head regulatory affairs at Credit Suisse and a former official at the US Office of the Comptroller of the Currency, emphasized the importance of ensuring that banks embed compliance and integrity in their conduct and culture. This means ensuring that compliance and integrity are not just spoken about and on a piece of paper, but are lived in practice across the organisation. “Executives need to see compliance not just as a cost, but as an asset, as it is core to sustainability of shareholder value”, she stressed.

But how can big companies, employing tens of thousands of people, be certain their staff practice what is preached? Visibility and transparency are crucial, noted all the speakers, including a top representative from Switzerland’s FINMA financial markets regulator.

All agreed that a firm’s management needs to drive the compliance message home, not just in written communications and staff handbooks, but every single day. That means, while touring the office, factory or trading floor, bosses should not just ask about sales or morale, but also use the opportunity to remind staff about the compliance imperative. “There are still huge differences in compliance appreciation, though big companies have made big strides in recent years”, noted Andreas Länzlinger, a partner at top Swiss corporate lawyers Bär & Karrer, adding an outside counsel’s perspective. “But there are still a few who think it won’t ever happen to them.”

“We have to find ways to incentivize correct conduct”, Bhavsar added, to general agreement.

Financial inducements, promotions or just regular non-material back slapping were all mentioned as potential contributors.

Should a crisis ever arise, agility was paramount, all the participants agreed – many recollecting their own direct experience. A major crisis could involve a board of directors, executive team and a group’s legal, audit, security and compliance heads. Irrespective of the numbers and titles, what mattered was to provide a single and coherent message. That requires a clear and jointly understood chain of command, with recognized lines of responsibility.

With media and public interest intense, particularly after the financial crisis, companies cannot risk mixed or conflicting messages. Technological progress made everyone a potential eyewitness. That makes speed and agility of corporate response all the more important. With smartphones all but ubiquitous, embarrassing pictures can be uploaded within seconds and go viral in minutes – as some airlines, for example, have learned recently – to their cost.

“You need a response team with clearly appointed experts. But you also need short reporting lines to respond quickly to breaking news”, noted Van Eenennaam.

“Above all, be flexible. No investigations plan I’ve ever seen made it through to the end unchanged. Also consider that a cheap and quick investigation can often turn out to be expensive and lengthy, as high-quality results are a general expectation when managing today’s crises.”

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