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1 – 10 of 512Against a backdrop of money laundering scandals in the banking industry, this study aims to assess anti-money laundering (AML) reporting obligations of bankers in the UK. By…
Abstract
Purpose
Against a backdrop of money laundering scandals in the banking industry, this study aims to assess anti-money laundering (AML) reporting obligations of bankers in the UK. By evaluating the effectiveness of the current suspicious activity report (SAR) regime, this study seeks to use the senior management functions of the Senior Managers and Certification Regime (SMCR) to achieve the goals of AML law within the banking sector.
Design/methodology/approach
This study firstly evaluates the efficiencies of the available risk-based sanctions aimed at making the banks the gatekeeper for money laundering. It points out the three-fold deficiencies of the SAR regime in the UK. Lastly, it discusses and examines the merits of multiple proposals for reformation.
Findings
It is argued that the risk-based sanctions have failed to achieve their goals to deter banks from abusing their products and services to facilitate money laundering activities. In revealing the three-fold deficiencies of the SAR regime – theoretical flaws, practical inapplicability and institutional culture – this study argues for both the retainment of the current regime and the repositioning of regulation focus on the reformation of institutional culture, particularly within large or multinational corporates, in terms of their commitment to fulfilling AML obligations.
Originality/value
This essay has concluded that the regime has correct tools under the Proceeds of Crime Act 2002, the Money Laundering Regulations 2017 and the SMCR to address problems associated with AML reporting obligations imposed on the banking sector.
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Ian P. Dewing and Peter O. Russell
Under the Financial Services and Markets Act 2000, the Financial Services Authority (FSA) is the single regulator of firms in the UK financial services industry. The Act grants…
Abstract
Purpose
Under the Financial Services and Markets Act 2000, the Financial Services Authority (FSA) is the single regulator of firms in the UK financial services industry. The Act grants extensive powers to the FSA such that it can impose by rules and regulations additional corporate governance requirements on firms in the financial services industry. The legislative and regulatory requirements also extend to individuals under the FSA approved persons' regime. The purpose of the paper is to examine this individualization of corporate governance.
Design/methodology/approach
The paper first explores the rise to significance of internal control and risk management in corporate governance and regulation, and links this to Beck's risk society and individualization theses. The extent of the individualization of corporate governance by the approved persons' regime is explored by examining three sources of evidence: the FSA's documents setting out the approved persons' regime; the initial perceptions about the implementation of the approved persons' regime from interviews with high‐level individuals in the financial services industry; and the outcomes of illustrative FSA enforcement actions against individuals.
Findings
The findings are that the FSA has developed a comprehensive and formidable apparatus for the individualization of corporate governance in the UK's financial services industry. It is argued that a discourse based on the interpretive evaluations of internal control and risk management may be replacing a discourse based on the quantitative techniques of management accounting, which may be characterised as the demise of the “calculating self” and the rise of the “auditable self”.
Practical implications
The FSA's approved persons' regime could be developed as a model for other areas of the private and public sectors, where for regulatory purposes it may be desirable to identify approved or official roles.
Originality/value
The ability of regulators to “make” corporate governance by rules and regulations is relatively unexplored. Also, the focus of corporate governance is on firms rather than individuals. The paper considers the extension of corporate governance from the firm to the individual that may be achieved by regulation.
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Campbell Heggen, VG Sridharan and Nava Subramaniam
The purpose of this paper is to examine why firms governed by the same environmental management standards within an industry exhibit contrasting responses, with some adhering to…
Abstract
Purpose
The purpose of this paper is to examine why firms governed by the same environmental management standards within an industry exhibit contrasting responses, with some adhering to the letter and others achieving the spirit behind the standards.
Design/methodology/approach
Using Arena et al. (2010) as an analytical schema to examine the institutional dynamics behind such contrasting responses, the paper analyses archival and interview data relating to firm strategy, control technology and human expertise in two contrasting Australian forestry firms.
Findings
The embedding and decoupling of environmental standards with a firm’s environmental management practices is influenced, first, by the extent to which founder directors and senior management integrate environmental responsibility with the underlying business motives and, second, by the use of organisational beliefs and values systems to institutionalise the integrated strategic rationality throughout the firm. Finally, informed by the institutionalised strategic rationality, the participation and expertise of actors across the organisational hierarchy determine the level to which the design and execution of the eco-control technologies move beyond merely monitoring compliance, and act to facilitate continuous improvement, knowledge integration and organisational learning at the operational level.
Originality/value
This paper responds to institutional theorists’ call for a holistic explanation that considers the interactions among several intra-organisational factors to explain the dynamics behind why some firms decouple while others do not, even though the firms exist in the same social and regulatory context.
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Bruce Hiler, Thomas Kuczajda and Aseel Rabie
The purpose of this paper is to describe the exposure and the responsibilities of a broker‐dealer's senior management under NASD's and the NYSE's new rules, emphasizing a regular…
Abstract
Purpose
The purpose of this paper is to describe the exposure and the responsibilities of a broker‐dealer's senior management under NASD's and the NYSE's new rules, emphasizing a regular review of supervisory and compliance systems.
Design/methodology/approach
Describes new rules, contained primarily in NASD Rules 3010, 3012, and 3013 and amendments to NYSE Rule 342, and the SROs' intentions underlying those rules; provides additional regulatory guidance on privilege issues related to CEO/CCO meetings and reports, documentation of compliance with the new rules, periodic review of office category designations, specific requirements for “offices of convenience,” and procedures to ensure up‐to‐date identification of producing managers; assesses the potential increase in exposure for CEOs, CCOs, and others under the new rules.
Findings
Both the NASD and the NYSE have made clear by their establishment of the new supervisory framework and in guidance to members that they expect increased attention to maintaining adequate compliance and supervisory systems at the highest levels of their member organizations.
Originality/value
Conveys an important message concerning the need for CEOs and CCOs to become increasingly involved in compliance reviews and knowledgeable about supervisory systems.
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Thomas N. Garavan, John P. Wilson, Christine Cross, Ronan Carbery, Inga Sieben, Andries de Grip, Christer Strandberg, Claire Gubbins, Valerie Shanahan, Carole Hogan, Martin McCracken and Norma Heaton
Utilising data from 18 in‐depth case studies, this study seeks to explore training, development and human resource development (HRD) practices in European call centres. It aims to…
Abstract
Purpose
Utilising data from 18 in‐depth case studies, this study seeks to explore training, development and human resource development (HRD) practices in European call centres. It aims to argue that the complexity and diversity of training, development and HRD practices is best understood by studying the multilayered contexts within which call centres operate. Call centres operate as open systems and training, development and HRD practices are influenced by environmental, strategic, organisational and temporal conditions.
Design/methodology/approach
The study utilised a range of research methods, including in‐depth interviews with multiple stakeholders, documentary analysis and observation. The study was conducted over a two‐year period.
Findings
The results indicate that normative models of HRD are not particularly valuable and that training, development and HRD in call centres is emergent and highly complex.
Originality/value
This study represents one of the first studies to investigate training and development and HRD practices and systems in European call centres.
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The purpose of this paper is to examine the effectiveness of UK investment firms’ implementation of the requirements in Commission Delegated Regulation 2017/589 (more commonly…
Abstract
Purpose
The purpose of this paper is to examine the effectiveness of UK investment firms’ implementation of the requirements in Commission Delegated Regulation 2017/589 (more commonly known as “Regulatory Technical Standard 6” or “RTS 6”) that govern the conduct of algorithmic trading activities.
Design/methodology/approach
A qualitative examination of 19 semi-structured interviews with practitioners working for, or with, UK investment firms engaged in algorithmic trading activities.
Findings
The paper finds that practitioners generally have a good understanding of the requirements in RTS 6. Some lack knowledge of algorithms, coding and algorithmic strategies but have used best efforts to implement RTS 6. However, regulatory fatigue, complacency, cost pressures, governance in international groups, overreliance on external knowledge and generous risk parameter calibration threaten to undermine these efforts.
Research limitations/implications
The study’s findings are limited to the participants’ insights. Some areas of the RTS 6 regime attracted little comment from participants.
Practical implications
The paper proposes the introduction of mandatory algorithmic trading qualification requirements for key staff; the lessening of the requirements in RTS 6 for automated executors; and the introduction of a recognised software vendor regime to reduce duplication and improve coordination between market participants that deploy algorithmic trading systems.
Originality/value
To the best of the author’s knowledge, the study represents the first qualitative examination of firms’ implementation of the algorithmic trading regime in the second Markets in Financial Instruments Directive 2014/65/EU.
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The relationship between trust, accountability and procedural justice is studied via research into British credit unions (CUs) following regulatory reform to remedy problems…
Abstract
Purpose
The relationship between trust, accountability and procedural justice is studied via research into British credit unions (CUs) following regulatory reform to remedy problems exposed by the 2007–2008 global financial crisis.
Design/methodology/approach
Interviews at 13 case studies of different types and sizes of credit unions in Glasgow, Scotland, are examined using template analysis and abductive theorizing to understand the effects of disproportionate reforms on small credit unions.
Findings
Smaller credit unions found three regulatory changes – namely dual regulators, increased minimum reserves and introduction of the Senior Managers and Certification Regime – excessive. Excessive change generated distrust in regulators. Regulators' insufficient attention to procedural justice contributed to this distrust.
Originality/value
Linkage of multidimensional confluent trust to a multilevel system of accountability provides an original way of understanding how indiscriminate attempts at trust repair damage some elements of trust in formal regulatory systems. Recognition of the need for procedural justice to enable smaller credit unions to articulate their extant checks and potential exemption from formal regulations provides another valuable contribution. The explanation of the abductive logic employed is also original.
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Huei-Wen Pao, Cheng-Yu Lee, Pi-Hui Chung and Hsueh-Liang Wu
The industry-wide adoption of a novel practice is often considered to be an institutional change. Although research on institutionalization has been accumulating, how and why…
Abstract
Purpose
The industry-wide adoption of a novel practice is often considered to be an institutional change. Although research on institutionalization has been accumulating, how and why embedded actors in the field become motivated to embrace change that remains sidelined. Viewing the introduction of a new human resource management practice, the recruitment of non-compulsory certified manpower, which is still in its infancy in the service sector of Taiwan, as a new institution, the purpose of this paper is to identify the distinct motives behind firms’ hiring decisions, and examine the extent to which such hiring decisions are contingent on institutional conditions and firm attributes.
Design/methodology/approach
The data used to test the hypotheses were drawn from a survey on service firms in Taiwan in the second half of 2011. Hypotheses were examined through moderated hierarchical regression analyses in a sample of 254 Taiwanese service firms across major sectors.
Findings
Integrating the resource dependency and social contagion views, the study contends that resource scarcity drives, or legitimacy enables, service firms to deviate from traditional hiring patterns and instead adopt new preferences toward certified manpower. The study not only shows that social factors should be incorporated into the diffusion of a new HR recruitment practice in the service sector, which is traditionally based upon economic considerations, but also sheds light on the context-dependent nature of the process of institutional innovation.
Originality/value
This study is an attempt not only to test a dual-theoretical model on the extent to which a service firm’s new hiring pattern is influenced by two distinct types of motivation, but also to evidence how an institutional innovation, in terms of the regime of service manpower certification, takes root and spreads in the field. The managerially discretional account of the resource dependence theory needs to be reconciled with social contagion theory, which highlights the influence of collective actions and so provides a better understanding of the diffusion of new HR recruitment practices in the service industry.
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Abdulkadir Madawaki, Aidi Ahmi and Halimah @ Nasibah Ahmad
The purpose of this paper is to demonstrate the relationship between internal audit functions (IAF) and financial reporting quality (FRQ) and whether such a relationship is…
Abstract
Purpose
The purpose of this paper is to demonstrate the relationship between internal audit functions (IAF) and financial reporting quality (FRQ) and whether such a relationship is moderated by senior management support (SMS) in listed companies in Nigerian Stock Exchange (NSE).
Design/methodology/approach
This research is a cross-sectional study, using primary data in the form of a survey sent to 175 listed companies in NSE. A total of 149 questionnaires have been collected and analysed out of which 97 were found to be useful and used in the final analysis.
Findings
The findings indicate a positive and significant relationship between internal audit qualities of work performed, internal control activities, coordination between internal and external auditors and FRQ and this finding was also supported by SMS as a moderator. However, the results show a negative and insignificant relationship between internal audit competency, organisational status and FRQ.
Research limitations/implications
The findings support the assumption with regard to agency theory. The board should support the IAF to serve as an effective monitoring mechanism in minimising opportunistic management actions. Regulators should also ensure adequate structures that will strengthen the organisational status of the internal auditors to perform towards improving FRQ.
Originality/value
The study contributes to the existing literature by assessing the effect of IAF on FRQ as moderated by SMS.
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In order to succeed in an action under the Equal Pay Act 1970, should the woman and the man be employed by the same employer on like work at the same time or would the woman still…
Abstract
In order to succeed in an action under the Equal Pay Act 1970, should the woman and the man be employed by the same employer on like work at the same time or would the woman still be covered by the Act if she were employed on like work in succession to the man? This is the question which had to be solved in Macarthys Ltd v. Smith. Unfortunately it was not. Their Lordships interpreted the relevant section in different ways and since Article 119 of the Treaty of Rome was also subject to different interpretations, the case has been referred to the European Court of Justice.