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In most industries, legal entities of a certain size and complexity must have a compliance function. Such requirement is either set forth by regulatory law or the governance rules of the relevant organisation. In the highly regulated credit industry, the role and responsibilities of the compliance function are more precisely defined than in other industries. This paper aims to analyse the personal accountability of senior compliance officers in a bank’s compliance function when there is a failure of proper compliance.

This paper is based on a keynote addressed at Jesus College, University of Cambridge, 7 September 2016. The author approaches the issue of senior compliance management by analysing development of international financial regulation with respect to legal requirements for compliance function. Subsequently, the author determines what constitutes senior compliance management and applies the various legal regimes to situations of compliance failures.

While the accountability of the chief compliance officer and deputy for compliance failures is not set forth in regulatory law, courts and scholars have acknowledged such personal responsibility exists resorting to principles of civil law (contracts or torts), criminal law or employment law. Approaches and questions for this legal analysis are similar in a civil law as well as in common law jurisdiction. The most relevant breach of contract of the chief compliance officer will be an omission to act (forbearance), i.e. the failure to properly organize the compliance function and/or to immediately report a compliance risk to the board.

Scholarly work in the law of compliance is still somewhat limited, thus the research also includes practitioners’ observations. The accountability of senior compliance management for compliance failures represents a growing trend in corporate governance to seek individual accountability for corporate misconduct; see, for example, US Department of Justice (DOJ) in its so-called Yates memorandum on “individual accountability for corporate wrongdoing”.

In incidents of non-compliance, banks and their compliance officers should be able to exculpate themselves if they can demonstrate proper organization of the compliance function.

The originality of this general review is to focus the analysis of accountability of senior compliance management on the credit industry and to consider latest developments in international financial regulation, such as the supervisory review and evaluation process (SREP) by the European Central Bank (ECB) in the single supervisory mechanism (SSM) or the corporate governance principles for banks by the Basel Committee on Banking Supervision (BCBS).

Using the backdrop of an (apparently) extended visit to the West Indies, analogies with key concerns of internal audit are drawn. An unusual and refreshing way of exploring the main themes ‐ a discussion between Bill and Jack on tour in the islands ‐ forms the debate. Explores the concepts of control, necessary procedures, fraud and corruption, supporting systems, creativity and chaos, and building a corporate control facility.

Using the backdrop of an (apparently) extended visit to the West Indies, analogies with key concerns of internal audit are drawn. An unusual and refreshing way of exploring the main themes ‐ a discussion between Bill and Jack on tour in the islands ‐ forms the debate. Explores the concepts of control, necessary procedures, fraud and corruption, supporting systems, creativity and chaos, and building a corporate control facility.

This chapter examines performance management, which has arguably been the kernel of New Public Management inspired version of public sector reform. The first part is a literature review that looks at experiences of performance management in both developed and developing countries. It looks at the difficulty in transferring public sector reforms from developed to developing countries. This is followed by the evaluation of performance management in the post-1994 public service in South Africa. Both the individual and organisational performance systems are highlighted, followed by an analysis of performance management reforms. There is a well-developed performance management system but the empirical data and qualitative reports found that it has not worked particularly well. There are concerns around a number of issues, including the measurement of targets; the signing of performance targets; a focus on outputs rather than outcomes; a lack of harmonisation between individual and organisational performance; a lack of capacity of managers, which in some cases is due to unskilled patronage appointments; a focus on compliance rather than performance; and a lack of accountability.

The purpose of this paper is to explore whether and how changes in the management control systems (MCS) of post-secondary institutions (PSIs) in Western Canada can be described and explained in terms of formal and informal MCS; and whether and how changes in the MCS of PSIs in Western Canada can be described and explained in terms of an integrative contingency-based framework of MCS based on regulatory accountability systems, competitive markets and organizational culture?

The empirical research was undertaken with an exploratory mixed design. The first phase involved descriptive univariate and bivariate statistics as well as non-parametric statistics computed on data from annual reports and financial statements of 46 PSIs in Western Canada to quantitatively explore MCS. The second phase involved the grounded theory (GT) analysis of annual reports of 46 PSIs in Western Canada to qualitatively explore formal MCS in relation to changes in contingencies. The third phase involved the GT analysis of 20 semi-structured interviews of senior managers from PSIs in Western Canada to qualitatively explore informal MCS in relation to formal MCS and changes in contingencies.

The research showed that emphasis on formal MCS in Western Canadian PSIs resulted in biased compliance within informal MCS. The exploratory research also demonstrated that the distinction between formal and informal MCS was better understood in a wider framing of MCS in terms of regulatory accountability systems, competitive markets and organizational culture.

This research led to the elaboration of an exploratory theoretical framework to subsume the distinction between formal and informal MCS into an integrative contingency-based framework of MCS.

This paper uses a stakeholder approach to examine how the role of accounting and the status of accountants changed over a 30 year period (1970 to 2000) in a major Australian government trading enterprise. Data are gathered from semi‐structured interviews with organizational participants and documentation. The study provides support for the importance of stakeholders in shaping organizational processes and practices, including accounting practices, and for the effects of changes in stakeholder constituency and agenda on such practices. The study also provides evidence of the roles accounting and accountants may play in implementing a stakeholder agenda, including both instrumental and symbolic roles, and how the status of accountants may rise and fall commensurate with those roles.

Public management work has tended to ignore the application of benchmarking accountability of local government authorities (LGAs) in public procurement. To that effect, the purpose of this paper is to present the applicability of a benchmarking model as an instrument for improving accountability of procuring entities such as LGAs in public procurement practices.

A case study from United States Agency for International Development funded Chemonics International’s Program—Pamoja Twajenga in Tanzania has been used to effectively showcase the efficacy of the benchmarking model in increasing compliance and improve accountability of LGAs as procuring entities. Performance assessment of eight Tanzania LGAs’ internal public procurement practices was conducted using the benchmarking model. Benchmarking Framework of Compliance Standards and Performance Indictors in Public Procurement (FCSPIPP) was developed and applied in conducting a benchmark assessment of the LGAs. The methodology of a benchmark assessment encompassed number scoring of perceived performance of each LGA for each indicator of a compliance standard.

The case study has conceded that the benchmarking model is an instrument which can be applied for improving the accountability of LGAs in public procurement practices. Looking at the scale of LGAs’ purchases, the case study reveals that monitoring compliance may greatly benefit from the methodological approach of benchmarking. The benchmark assessment adopted in this case study offers a collective instrument for LGAs in developing countries to measure, compare and learn to improve in public procurement practices. The model offers public procurement entities, such as LGAs, with an opportunity to learn based on performance and improvement of peers. The FCSPIPP presented in this case study is the main pillar of the benchmark assessment in public procurement.

The major limitation of this case study is that it relies only on the findings and lessons learnt from the benchmarking of eight LGAs in Tanzania. Presumably, it would be useful to would have been more useful if more countries from developing economies were included in the case study; it could have increased the plausibility of the applicability of the model at the local government levels.

Implicitly, public procurement and regulatory authorities in developing countries need to learn, improve its role and develop capacity in the application of benchmarking for enforcing compliance in public procurement practices. Since the approach is based on listening from the procuring entities, the model provides the procurement Authority to work on policy challenges affecting the procuring entities to comply with what the procurement process requires. Deliberate efforts are needed to strengthen the capacity of developing countries to put in place policies and reforms that pave the way for the use of process benchmarking in public procurement at the LGAs level.

Since benchmarking encourages active participation of the user department and community in the procurement process, presupposes curbing corruption red flags and improved value for money contracts for improved social services. The methodological approach of monitoring procuring entities, using process benchmarking, provides public procurement and regulatory agencies and LGAs a collegial, participative and self-discovering on what constitutes compliance. This may enhance the sense of answerability of procurement officers to citizens.

This study confirms the efficacy of the benchmarking model as an alternative and complementary instrument to traditional compliance audit in public procurement. The application of an FCSPIPP means that benchmarking results may be used to improve public procurement practices.

Risk management is now considered the responsibility of all financial services professionals, not just senior leaders or risk specialists. Very little is known about the role of staff in risk management, so the purpose of this paper is to, first, clarify what constitutes “desirable” risk management behaviour by financial services staff based on the practitioner and regulatory literature. Based on this understanding, the authors analyse the characteristics of those who are most likely to display such behaviour.

The paper analyses some 36,000 survey responses across ten banks headquartered in Anglo countries.

Desirable risk management behaviour at the employee level includes compliance but goes well beyond mere compliance to include speaking up, thoughtful engagement with and accountability for the risk management framework. The authors find a significant negative association between individual risk tolerance and desirable risk management behaviour. Older workers as well as those with greater seniority are more likely to report desirable risk management behaviour. The link between female gender and risk management behaviour is not supported after controlling for individual risk attitudes. The authors provide evidence that females who succeed in financial services do not conform to traditional female stereotypes.

Findings suggest financial institutions should hire/retain more older workers and those with lower risk tolerance to improve risk management. Hiring more females, however, is not likely to lead to better risk management.

The paper is the first to investigate risk management behaviour in financial services staff. The research exploits a unique, difficult to obtain data set.

Federal agencies are relying increasingly on contractors to perform their missions. With hundreds of billions of tax dollars spent each year on goods and services, it is essential that federal acquisition be handled in an efficient, effective, and accountable manner. The Government Accountability Office (GAO), however--as well as other accountability organizations, inspectors general, and the agencies themselves--continue to identify systemic weaknesses in key areas of acquisition. In fact, the acquisition function at several agencies has been on GAO's high-risk list, which identifies areas in the federal government with greater vulnerability to fraud, waste, abuse, and mismanagement. In January 2005, we added interagency contracting to this list. Far too often, the result of poor acquisitions has been an inability to obtain quality goods and services on time and at a fair price. We can no longer afford such outcomes. Given current fiscal demands and the fiscal challenges we are likely to face in the 21st century, the federal government must improve its ability to acquire goods and services in a cost-effective manner. GAO developed this framework to enable high-level, qualitative assessments of the strengths and weaknesses of the acquisition function at federal agencies. Such assessments can help senior agency executives identify areas needing greater management attention, and enable accountability organizations (including GAO) to identify areas requiring more focused follow-up work. The framework consists of four interrelated cornerstones that our work has shown are essential to an efficient, effective, and accountable acquisition process: (1) organizational alignment and leadership, (2) policies and processes, (3) human capital, and (4) knowledge and information management. The framework supports an integrated evaluation approach, but each of these cornerstones can stand alone so users of this framework may tailor evaluations to an agency's specific needs.

Literature has widely studied the financial accountability pressures on NGOs but rarely analysed how NGOs respond to them. This paper studies one large humanitarian NGO to address this question. It investigates the NGO's responses to understand the extent to which NGOs are able to regain control over their own work and turn the frames of evaluation and accountability to their own advantage.

This article draws on a case study of one of the largest French humanitarian NGOs. Interviews and observation (both participant and non-participant) were conducted in the financial department of the NGO. These data are supplemented with field-level contextual interviews.

In the NGO studied, institutional pressure is largely mediated by compliance audits. The paper thus traces the consequences of compliance audits for the NGO's central finance teams and describes how they respond. The findings detail three responses to evaluation. First, to respond to the burden of evaluation, the organisation makes itself auditable and develops preparedness. Second, to respond to the anxiety of evaluation, the organisation engages in a process of purification and succumbs to the allure of the single figure. Third, building on its newly acquired auditability and purity, the organisation performs itself as a “corporatised NGO”. Together, these three responses constitute the NGO as an “entrepreneur” competing for eligibility, and financial literacy and managerialism become crucial to respond to pressure from institutional funders.

This paper extends the understanding of organisational responses to evaluation. The authors show the influence of evaluation systems on NGOs, but also how NGOs can react to regain control over their work and turn the frames of evaluation and accountability to their own advantage. However, despite several decades of calls for broader conceptions of NGO accountability, the case NGO prefers to promote a very narrow view of its performance, based solely on accounting compliance. It takes some pride in its ability to comply with funders' and auditors' demands. Turning a simple matter of compliance into a display of good performance, it builds a strategy and competitive advantage on its ability to respond competently to evaluation.