Are You Concerned About Governance & Compliance?

Your list of job responsibilities has just gotten longer. As a senior leader, the latest addition to the list is an unusual and unexpected one – CYA. This is the result of shifts in regulations, as well as culture around governance and compliance.

CYA, of course, stands for ‘Cover Your Ass’. But there is more. It also stands for: ‘Cause You’re Accountable. This is especially true given governance and regulatory trends.  Here we explore the implications as well as the strategies you can employ.

New Governance Requirements

CYA used to be seen as negative. As a somewhat selfish and underhand behavior, that put personal and political interests ahead of organizational goals. However, that is changing fast.

The requirements of corporate governance increasingly put leaders in the firing line for any breaches of compliance. Nowhere is this clearer than in respect of regulated industries such as financial services. As the UK financial regulator points out: ‘You must take steps to ensure that the business of the firm for which you are responsible is controlled effectively’. 

Today, CYA is no longer about politics or gamesmanship, but regulatory compliance too. For leaders in the financial services industry, DORA (and similar regulations) make CYA essential. In the event of a data breach or a system’s failure, they could be personally held liable, unless they can show that they took all reasonable precautions and necessary preparations.

What CYA Means Today

In the new regulatory environment, if you are not CYA, then you are probably not doing your job.  Specifically:

• You may not be applying due care and attention to your work. 
• You may not be managing risk effectively.
• You may not be taking care to ensure that risks are surfaced and attended to.
• You may not be taking sufficient steps to ensure resilience and prepare for the event that things go wrong.
• You may not be learning from mistakes and setbacks.
• You may not be ensuring that your colleagues are fully bought in.

Delivering on change and innovation is a risky business. DORA regulations in the EU mirror trends in other regulatory environments.  With leaders being increasingly held accountable for risk management and operational resilience.  It is not just the organization that will be held to account for failures, but leaders too.

Re-thinking CYA

A culture of personal accountability means a re-think of CYA. The new CYA means:

• Keeping clear records and documenting actions
• Involving others so that they share ownership and responsibility (rather than silos or solo runs)
• Ensuring clear and effective two-way communication
• Bringing risk out into the open and documenting its management
• Seek out divergent opinions, that includes welcoming whistleblowers and cynics
• Planning for resilience and recovery
• Ensuring sufficient rigor around plans and how they are reviewed

So, as a senior leader, how well are you C.Y.A.?

A word of caution:

C.Y.A. isn’t easy. Especially, if people keep you in the dark regarding risks & obstacles. However, if the regulator comes knocking, leaders can’t say they did not know, that nobody told them, or the matter was someone else’s responsibility.

As ‘the manager in charge’ the buck stops with you. That is why many leaders use solutions like Pitstop Analytics to ensure full visibility of KSFs & risks, including those that are normally hidden.

The particular advantage of Pitstop Analytics is its speed, with the power to gather the full perspectives of leaders, stakeholders & teams in 90 mins, rather than traditional approaches that can take 90 hours or even 90 days.

Contact us today for a demo and to find out more.