Perhaps I spent too much time this weekend sitting in my apartment listening to the news and weather reports about the approaching hurricane, but on Sunday after the warnings were lifted and family and friends were safe, with the exception of a few power outages, I started to think about the similarity between the preparation for the storm and a compliance program.
As early as Wednesday mid-day, we started to get reports about the course of the storm, the amount of damage it was doing and what was likely to happen when it hit New York City. On Thursday Government officials started to put into place evacuation plans. They held several press conferences that day. Other institutions started to alter their plans. Colleges and University in the area told incoming freshmen to delay their move-in to Monday and Tuesday. Religious institutions started to cancel worship services when it was announced that the Metropolitan Transit Authority was closing the subways and stopping bus service.
On Friday and Saturday people in evacuation zones started to leave their homes and stores closed early. I started to get more text messages from the City of New York about the progress of the storm and other related information.
The storm hit on Saturday night into Sunday morning and at least in NYC it was not as bad as expected. But what if it had been as least as bad as expected and we had not gone through this drill. What if it was worse?
That is when I started to think about how the preparation for the storm was really like a compliance program. As the Chief Compliance Officer you need to be prepared for the worse. Surveillance is key to knowing what is and is not happening. Training makes everyone aware of the potential consequences for non-compliance. Ongoing communication with everyone in the firm is essential. Having plans in place to deal with disasters or potential disasters is essential. Know what is going on in the industry. Are there new regulations or new rulings that impact your business? Do you know exactly what you would do when your regulator calls and says that they are coming for your regular periodic review? Do you know what they would find?
As a Chief Compliance Officer you want your firm to be prepared for the category 5 hurricane even if all you ever see is a tropical storm.
© 2011 by Sharon M. Davison, you may share this if you attribute to the author.