INSURANCE and Pensions Commissioner chairperson, Tendai Karonga has challenged compliance professionals to work towards changing the perceived lack of accountability in Zimbabwe, which has undermined credibility of the country.
BY TARISAI MANDIZHA
Speaking at the official launch of the Compliance Society of Zimbabwe (CoSoZ), Karonga said in view of the recognition of the compliance function by regulators, compliance practitioners are under increased pressure to be more accountable and demonstrate how the function adds value.
“I am pleased that we are establishing the CoSoZ, which will bring together all our compliance practitioners across all sectors and industries. CoSoZ will provide a platform for compliance professionals to apply their learning to the unique challenges. One of the foremost desires of CoSoZ is to influence the production of men and women who are critical, inquisitive, bold and creative,” he said.
“Our compliance practitioners are strongly encouraged to be consistent in being thinkers and doers rather than accumulators of facts and much idle knowledge.”
Compliance professionals ensure companies comply with outside regulatory requirements and internal policies. They may review and set standards for outside communications by requiring disclaimers in emails or may examine facilities to ensure they are accessible and safe. Compliance professionals may also design or update internal policies to mitigate the risk of the company breaking laws and regulations, and lead internal audits of procedures.
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Karonga said the significance of corporate compliance management was now widely recognised as essential aspect of risk management.
He said most regulatory authorities in Zimbabwe have codified the need for the boards of directors of corporate entities to ensure their institutions implement effective compliance frameworks and processes.
Karonga said corporate compliance should be a continuous process, once risk appetite policy is in place the setting up of an early warning system should not be over looked.
“The compliance profession in Zimbabwe has focused too much attention on compliance as a risk management process, while ignoring the fact that it is also a change intervention process,” he said.
“It has concentrated on changing the context in which such systems and processes are applied. One of the most complicated aspects of the management of change is the human element.”
Karonga said financial institutions provided critical roles of financial intermediation through banking institutions and funding or investment through insurance institutions and pension funds as well as the protection, safe guarding and monitoring of financial assets through appropriate practices by the Securities Commission.
“Poor corporate compliance management practices at financial institutions can arguably destabilise the entire national finance systems supporting the economy, ” he said.
“We all know that financial instability and investment are mortal enemies. A culture of compliance across the entire spectrum of the economy boosts confidence and we know confidence is critical to investment.”
CoSoZ president, Walter Zure said the establishment of the body had been informed by a quest for self-regulation of the compliance profession in Zimbabwe.
“Compliance continues to mean different things to different people. This lack of consensus reflects the fact that compliance ought to embrace an array of goals, not just one. Due to the foregoing CoSoZ defines compliance risk as the risk of impairment to the organisation’s business model, reputation and financial condition from failure to meet laws and regulations, internal standards and policies, and expectations of key stakeholders such as customers, employees and society as a whole,” he said.