Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
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This week:
1. Gender pay gap reporting: Interview with Innes Miller, Co-founder and Chief Commercial Officer of paygaps.com
We caught up with Innes Miller, Co-founder and Chief Commercial Officer at paygaps.com, for his views on the second round of gender pay gap reporting. Click here to read the full interview.
2. Culture of compliance case study: BNP Paribas brings conduct front and centre
As front office compliance becomes a significant theme in the banking sector, BNP Paribas introduces a number of chief conduct and control officers into its front-line business.
Chief compliance officer of the Americas Eric Young has overseen the rollout of a conduct programme that embeds conduct officers, usually associated with back office compliance functions, into first-line businesses. In an interview with Reuters, Young explains:
“They walk the trading floor; they walk the different parts of the business because they are either ex-traders, ex-sales people, and so they know an issue when they see one or hear one… For example, they might hear a trader or sales person on their phone and it just doesn’t sound right. Prevention is in some ways often more important than detection.”
The French lender has hired a number of these individuals into its wealth management division, and given them the responsibility of monitoring and identifying behaviours that could put the institution at risk.
Tools such as big data and analytics have proliferated in the world of compliance, allowing businesses to become much more accurate with the reporting of fraud and financial crime. However, data isn’t as effective in counteracting issues relating to misconduct and non-compliant behaviour. Acting pre-emptively on the front line when these actions could first be identified is still dependent upon human judgement and intervention.
Implementing conduct and control officers is just one of numerous changes the French bank is making to overhaul its internal culture of conduct and compliance. Another method used to tackle high risk behaviour is to link it to financial compensation and promotions. BNP has set behaviour criteria that all employees must adhere to, and this is monitored by human resources and risk management. “In some cases, bonuses have been cut for those who have not made the grade”, said Young.
Furthermore, to reach director and managing director level, a segment of candidate interviews now focuses on behaviour and conduct, ensuring that all senior employees adhere to the bank’s code of conduct. The bank has also introduced a ‘permanent control committee’, which twice a year assesses senior executives and certain individuals identified as ‘material risk takers’, on whether they are behaving appropriately.
The bank’s overhaul of its attitude towards conduct comes as a result of a remediation plan put together in 2014 as part of a settlement with the U.S Department of Justice (DoJ) over U.S. sanctions violations, which also resulted in a $8.9 billion penalty. The bank was also fined $350 million in 2017 by the New York Department of Financial Services for illegal foreign exchange related conduct.
Click here to read the full Reuters interview with BNP Paribas’ chief compliance officer Eric Young
Movers & Shakers of the week
Panel Watch
Five Firms Awarded £16M Government Legal Panel Contract
Moves
Weil Gotshal hires Clifford Chance partner in Paris
Weil, Gotshal & Manges has hired Benjamin de Blegiers from Clifford Chance in Paris as a private equity and M&S partner
Second Akin Gump partner heads for Dechert
Akin Gump partner Sarah Smith will join Dechert’s finance practice in London
Office Openings & Closings
Norton Rose Fulbright closes its office in Colombia
Dentons absorbs Australian firm Gadens’ Adelaide branch
Inclusion & Diversity
Linklaters expands reverse mentoring scheme to all partners
HFW boosts number of women on global management board
Technology & Innovation
EY acquires Thomson Reuters managed legal services arm
Slaughters and five US firms are latest to back legal tech startup Reynen Court
Bird & Bird creates new online platform for start-ups
EY poised to swoop for Thomson Reuters’ managed legal services arm
Partner Promotions
Dentons reveals 25 new UK and European partners in latest promotions round
Penningtons Manches makes up seven lawyers to partner
Pinsent Masons makes 15 global partner promotions
Freshfields promotes eight City lawyers to partner in expanded round