However, it is possible to look at compliance in a very different way, as a two-way street and not a “one-way” street. Let me explain what I mean. A sound and effective compliance program can be used, appropriately in my view, as a tool that would permit on-boarding of what is seen as risky business. To continue with the example of correspondent banking, if a U.S. correspondent had a sound and effective compliance program that was well tailored to identify and control the risks of money laundering, terrorist financing, and sanctions evasion, this correspondent might become sufficiently confident to on-board risk. This means that instead of closing accounts for everyone in a specific geographic area, it would continue with some of these accounts, or even open new accounts. Now, I do not want anyone to think I am saying that all correspondents can reasonably have such confidence now. At this point in our journey, I concede the need to develop greater confidence that the identified risks can be controlled at a reasonable cost. With that said, I believe that we will reach a place where ethics and compliance programs are sufficiently developed so organizations can make considered decisions to on-board risk and keep it within the accepted risk appetite by using effective controls. I look forward to that time as we move to the next level. 3.
We could spend much time discussing how this transformation happened. From my vantage point, it happened because of the combined effects of the Federal sentencing guidelines, the Delaware Chancery Court’s Caremark decision,1 and the post-Enron legislation known as Sarbanes Oxley. Of course, other events also fueled the transformation, and in the financial services industry, the worst financial crisis our country has seen since the Great Depression became a burning platform. While it is always important to look back at the road traveled, I am not going to spend any more time on that particular topic. Instead, today I intend to look forward at where compliance is going, and to forecast for our future some things we should pay attention to now. I will discuss five different items, and I predict that some of the greatest accomplishments for compliance are not in the recent past but in the not-too-distant future. If we plan ahead, and if we can successfully adapt to changing circumstances in our respective industries and in the national and global economies, then 20 years from now you will listen to another keynote speaker remarking on further amazing progress for the compliance profession. In short, we are on our way to another level. Important steps toward the next level Most of my remarks today will be devoted to the things that I believe will get us to the next level. Let me turn to them now. 1.