Tips on Training
"Itís really hard to enforce policies and procedures if people donít know what they are."
So said LPL Financial Services compliance officer Michelle Jacko at last weekís NRS conference. "As compliance officers," she said, "our number one goal is to make sure we are going out there and educating and training" employees about the firmís new compliance program.
Jacko and other panelists noted that there are many different ways to conduct training. Some ideas:
hold a firm-wide meeting where everyone gathers in a big room;
do a "road show" where the CCO travels to the firmís regional or global offices;
prepare and circulate internal compliance newsflashes covering new developments;
create a list of frequently asked compliance questions and answers;
post guidance on the firmís intranet;
hold web-based training;
hold training via conference calls; and
Consultant Ann Oglanian recommended that training sessions have a sign-in sheet. Not only is it evidence to the SEC that "you are doing your job," she said, it also imposes accountability on the employees who attended the session. Ideally, electronic or telephonic training also should provide some means to verify employeesí attendance.
Jacko said she goes "a step farther" and reports back to supervisors if an employee doesnít show up for a training session. And, she added, "I expect that to be addressed in their review."
Consider how new hires will be trained. And communicate the importance of compliance to new hires. Barbara Brooke Manning, CCO of Schroder Investment Management North America, said that she requires all new employees to meet with her as part of their orientation.
When preparing the training materials, keep in mind that employees should be encouraged to view policies and procedures not as something emanating from the compliance department, but rather as the firmís policies and procedures that they are responsible for. The compliance department "might be the ones to enforce it," said Jacko, but the various business lines should actually administer it. Panelists suggested that after training, CCOs follow up with testing to make sure that employees really understood the presentation. That can surface areas in the procedures that need to be refined, they added.
And if a department head tells you he doesnít want you to conduct training in his department, donít back down. Panelists recounted the story of one compliance officer who got in trouble after handing a set of compliance procedures to the firmís chief investment officer. The compliance officer wanted to conduct training, but was told, in effect, "go away." When the SEC uncovered violative trading by one of the firmís portfolio managers, the manager attempted to defend himself by saying, in effect, "I never was told that was wrong."