Regulatory Compliance and Ethical Conduct
Compliance as a governance obligation
The board is responsible for a compliance culture, not merely a compliance function. Key concepts: regulatory obligations mapped to controls, a compliance monitoring plan, breach reporting and remediation, and whistleblowing channels with protection for reporters.
Ethics and conduct
Codes of conduct translate values into expected behaviours. Tone at the top, incentives and discipline shape actual conduct. Candidates should recognise conflicts between commercial pressure and ethical obligations, and know that ethical frameworks apply beyond legal minimums.
Key regulatory themes
- Market conduct and disclosure accuracy.
- Anti-bribery and corruption: gifts, hospitality, facilitation payments, third-party due diligence.
- Conflicts of interest: identification, disclosure, management or avoidance.
- Data protection and confidentiality.
- Whistleblowing: independent reporting lines, no detriment to reporters.
Traps
- Assuming legal compliance equals ethical conduct; it does not.
- Treating a code of conduct as sufficient without training, monitoring and enforcement.
- Overlooking third-party and supply-chain risk in bribery questions.
- Believing a whistleblowing policy alone is adequate without a protected, independent channel.
Worked example
A sales director approves a large gift to a public official to "speed up" a routine approval. Is this acceptable if small? Facilitation payments are typically prohibited or tightly restricted; the correct answer is to refuse and escalate. Rule of thumb: if you would not want the payment disclosed publicly, it likely breaches policy.