Managing a Compliance Team in Transition: Leadership Series
Rutherford is proud to introduce its Leadership Series, a new series of interviews with key players within the compliance, risk and legal sectors. These informal conversations will serve as an opportunity for compliance professionals to get insights on what topics are trending within their field. For this first instalment of the series, we sat down with David Young, Senior Risk, Compliance and Governance Specialist, to discuss the challenges that come with managing a compliance team in transition.
David, can you let us know about the most common scenario you come into as a Risk, Compliance and Governance Specialist?
The most common scenario I come into is where I have been brought in because the chief compliance officer has resigned or has been removed. And if he's been removed, it's often because of a specific event which has led to regulatory criticism of some description and along with that is not just criticism of the business, but of the compliance function for failing to stop the business doing whatever it was doing wrong.
What sort of environment are you left with when this happens?
Certainly a lot of unhappy faces: quite often you go in and are brought into these environments and people say "but we've been telling the business this for a long time." And it's kind of thrusting in front of them that they've been pretty powerless, historically. It is incredibly important to talk to the staff you inherit, quickly. They’ve been in an environment where they have been told that they’re defective or deficient in some way, and they feel that that’s an unfair judgment because they have been ignored or suppressed in the past.
What would you say are the best practices when faced with a situation like this?
Clearly, talking to the staff very early on is important. You're not going to make an instantaneous difference. You're not going to walk in and by the time you've finished saying what you're going to say on that first day they're completely behind you, you have to prove yourself to them. And quite often these are people who've had empty promises made to them before so they're deeply suspicious of somebody else coming along and promising everything. You need to make that initial engagement with the whole team as short as possible. You start by winning the hearts and minds of your individual members of the team. The key thing being that you have to perform: whatever you promise them, whatever you say to them you will do, you better do it.
Trust would be extremely delicate at this point – how can you start winning them over?
Indeed, trust is extremely fragile. Listening to them, being the listening ear is more important than saying things, initially. It's very much a scenario where action is going to be much more important than words. But you do have to talk: you can't just shuffle in, occupy a seat that's probably still warm from its previous occupant and just sort of get your head buried in paper, that doesn't work either. Try to go for a few quick wins, if you can identify some key things that you can do relatively quickly.
I’m assuming this would be different for every business – it would depend on where they’re at – but what would represent wins?
In one case, the team was under strength and the previous incumbent wasn't allowed to recruit because the firm had lost confidence in him, didn't believe or understand his explanation of why he needed to increase the resource. Going in and getting that unblocked quickly was a quick win. In a completely different firm, the staff felt under-rewarded. There was one member of staff who had been there for five years and never once been given a pay rise and her salary was out of whack from the market. I thought hard about it, because I didn't want people queuing at the door, but there were three staff in that department that I got increases for in a couple of months.
What about the business? I imagine winning trust will take longer?
It does. I think you need to show that things are working differently in some way and that may be more proportionate judgements instead of being very black and white about things, or it may be that you start bringing people on board who are of notable caliber
So one or two key hires with the right energy levels can mix things up?
You always have to be careful with hires: if you've inherited a team which has got some quality people in it, but they've been poorly led in the past, bringing a layer of other people over the top could be sending the wrong message. You need to look for talent you can develop and bring up from that team. It is also important to address weaknesses. I never like easing people out of the business, I'm very aware it affects their lives and may affect their confidence level for a long time to come, but compliance teams are never so large that they can carry passengers. If you've got good quality staff that are basically covering up for, or pulling the extra load to make up for some dead wood, then it's unfair to the remaining staff, and will drag down the performance of the department as a whole to keep hold of that dead wood.
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