With remote work resulting in less oversight, shifting supply chains without proper due diligence and pressure to reduce cost or make up lost revenue, compliance teams across the globe are facing numerous risks in a business environment drastically changed by the COVID-19 pandemic. Post-crisis, many expect a heightened regulatory focus on misconduct that may have occurred during the pandemic, even as institutions scramble to modify existing risk assessment practices. On Thursday, Risk Assisting Network + Exchange (RANE), through its network of leading professionals, sought to provide guidance and offer practical perspectives on global compliance challenges companies now face, how to respond, and what should be prioritized as the world begins a slow crawl towards a new normal.
Sitting on the virtual panel was The Bahamas’ own Cheryl Bazard, an expert in the areas of compliance, corporate governance, and anti-money laundering issues. RANE has offices in New York, Boston, and Washington. Its Insight Series aims to provide business leaders across all industries with actionable strategies and direct knowledge on emerging risk issues from some of the world’s top experts in their fields.
Moderating the discussion, “The Effects of COVID-19 on Compliance Risks for Corporations” was David Lawrence, RANE’s founder and chief collaborative officer. When COVID first hit, for many in the business community the primary focus was continuity, said the panel of experts. Cyber, data privacy and compliance issues were not necessarily given as much attention, as employees around the world quickly scrambled to remote work sometimes using personal computers, USBs, and personal clouds to store company information. Now companies are grappling with how to tighten up controls again, essentially placing “the genie back in the bottle.” “We weren’t relaxing during the pandemic, but the adherence to standard compliance practices were not as rigidly applied.” said Mrs Bazard, one of three panelists. “Regulators across the globe were a bit flexible early on, given the circumstances, but as the return to some sense of normalcy resumes, they are now enforcing adherence in order to avoid a breakdown of local and international standards.”
The principal of the law firm, Bazard & Co., said compliance must continue to be seen as a “know” department and not a “no” department. She advised professionals listening in on the 60-minute, audio-only webinar to use this time to their advantage to understand the trajectory in which their clients are headed and as such, get to “know” them and their business better. Mrs Bazard, the founding president of the Bahamas Association of Compliance Officers (BACO), noted that while many governments rushed to prop up collapsing economies and provide cash-starved companies with financial assistance from public purses, the risk of corruption increased and as such, there should be a closer look at the flow of funds from these programmes.
Craig Moss, executive vice president of the Arizona-based Ethisphere, an institute which advances ethical business practices echoed similar sentiments. “People under business pressure can lead to corruption issues,” said Mr Moss. At Ethisphere, he is responsible for developing Leading Practices, a program designed to help companies and their suppliers reduce the risks associated with trade secret theft, counterfeiting, piracy, and corruption. An increase in fraud – bribery, corruption, theft, information loss – is more likely to happen in this present environment,” said Stephen Martin, a partner in StoneTurn, a global advisory firm, that assists companies, their counsel and government agencies on regulatory, risk and compliance issues, investigations and business disputes. Making the situation worse, said Mr Martin, compliance budgets get the axe during difficult financial periods with negative impact for monitoring and oversight of a remote workforce.
Drawing on more than 20 years of experience, the attorney advised companies to pay attention to data and to use this time to overhaul their risk assessment processes. Since less oversight of third parties are common during economic crisis, Mr. Martin recommended aggressive accounting to avoid employee fraud and workers’ misuse of company assets.
Still, businesses must beware. “Customers are paying attention to how you dealt with your employees during this crisis. Those who react well get the gold star of approval from their clientele,” said Mrs Bazard who noted that social media provides the platforms for praise and criticisms. This is the second webinar in as many months that Mrs Bazard has been featured as a panelist. She was the sole presenter for Dow Jones. Her presentation covered how COVID 19 could impact the news and financial information publisher and their clientele.