S5:E11 | Effective Strategies For Building Your Compliance Team | Compliance In Context

The Securities Compliance Podcast: Compliance In Context

Welcome back to the Compliance In Context podcast! On today’s show, we welcome in former NSCP Chair and current CCO of Robinhood, Norm Ashkenas, to discuss how firms can build a culture of compliance inside their firms and what it takes to build out an effective compliance team. In our Headlines section, the SEC Investor Advisory Committee considered draft recommendations on mandatory arbitration clauses and the expansion of retail investor access to alternative assets (among other items), and a dually registered firm settled SEC charges for failing to timely investigate and report suspicious transactions to FinCEN. And finally, we'll wrap up today's show with another installment of What’s On My Mind, where an old quote from Winnie the Pooh might just be the best thing we can do for our friends and loved ones during the holidays and these cold winter months.

Show

Headlines

• The SEC Investor Advisory Committee considered draft recommendations on mandatory arbitration clauses and the expansion of retail investor access to alternative assets
• Dual registrant settled SEC charges for failing to timely investigate and report suspicious transactions to FinCEN

Interview with Norm Ashkenas

• What is a culture of compliance? What does it mean? How do you know it’s present?
• How can you build a culture of compliance?
• Best practices when building out your compliance team
• Key things to look for when sourcing and building out your compliance team
• The importance of diversity of thought and perspective on your compliance team
• How should firms think about compliance collaboration with other business units as part of the hiring process?
• How should firms view unique skillsets and experiences when building out their compliance team?
• Best practices when using pre-formed hiring questions or question banks

What’s On My Mind

• Using a quote inspired by Winnie the Pooh, part of building our compliance team includes letting them know we’re there for them when they need us most

Quotes

12:20 – “Somebody I didn’t know reached out to me via Slack and said, ‘Hey, so-and-so senior executive thought I should reach out to you because we’re thinking about doing A and he said ‘You should talk to Norm and compliance first to see what they think and how to get it done.’’ That’s what I want to have happen. It’s not about me, it’s about somebody else thinking of compliance when we weren’t there.” – Norm Ashkenas

22:15 – “If you’re asking questions, certainly you’re starting with the technical expertise. If you’re looking for somebody who does surveillance on municipal securities, they have to know a great deal about that space to start, if that’s what you want them to do. So certainly you’re testing for that. Obviously, you are certainly looking for culture fits, again, another overused phrase. But if your firm is the type of firm that seeks to get alignment from everybody and its a firm where they don’t want somebody to present a solution, they want to have conversations with everybody who might be a stakeholder, get them all on the same page, and then have a final discussion, you need to find people who can do that kind of thing. If it’s a firm that’s more entrepreneurial, where it’s, ‘We want you to go solve the problems and see how many people react,’ you have to try to ask questions to glean what that is. So it does start with ‘What is your firm looking for after you hit the technical expertise?’ And then you also certainly want to ask how they fit into your overall compliance program and team. Complimentary skillsets are helpful. Like, you need, yes you want technical expertise, but in some cases, it’s ‘Am I hiring somebody to do this job in front of them for the next two or three years? Or am I hiring somebody who I think can do much more than this or different things? Am I hiring–I’ll use the phrase–a pocket knife? Somebody who’s got a multiplicity of things they can do. And I see them doing a number of different things. Those are things you’ve got to think about as you’re doing the hiring.” – Norm Ashkenas

38:06 – “Yeah, so interviewing is clearly important. Once you’ve got folks that you’ve determined might be qualified for the role, you wanna speak with them. And one of the things that we do here at Robin Hood, at least, is have... You use word banks; we often have question banks. I have some in my head, but I’ve been asked to put them down on paper, which is actually helpful exercise. And then when you build out for the interviews, you build out your diverse slate of interviewers to make sure you’ve got business partners; you’ve got oversight partners. You don’t have everybody sitting in front of them. Look just like you when you’re doing the interviews, reflect the firm and, yes, give them topics. Give them subject areas. Give them what to test on. And yes, you’re gonna have some sample questions. Sometimes it’s gonna be hypotheticals. I love giving candidates hypotheticals and, I’m not looking to get a right answer per se. It’s not about that. It’s about understanding how they think about whatever that is.” – Norm Ashkenas