Coffee & Compliance - interview with Alice Hammarroth

‍Compliance plays a crucial role in ensuring corporate governance. In your experience, what are the key elements that make an effective corporate governance framework? 

In general I would say it is good if you can keep the framework as clear and simple as possible with limited room for interpretation (especially when it comes to responsibilities, tasks and reporting lines). Ideally it should be easy to oversee and monitor and all components of the framework should connect to one and other as parts of a machinery (all reflecting the company’s strategies and risk appetite). Achieving this requires a close collaboration between departments, the management and the board so that the framework does not get outdated or merely theoretical. As the board cannot steer a company only by talking to employees and various business units, policy documents provide a written statement from the board to the company of what the board expects of the employees and the business in various situations. Therefore, try to keep these documents short and to the point. Larger companies may benefit from appointing a governance manager or a governance function and this will of course contribute to better internal governance and control.

The framework is a tool to ensure that strategies, goals and obligations may be fulfilled. It’s beneficial if employees are informed of the purpose of the framework and the strategies that it should reflect. Be transparent and involve employees and various departments when overseeing governing documents and processes or for instance when preparing training material. Appreciate and acknowledge people that contribute to good governance within the company and reward them sothat they know that ethics, diversity, risk management, transparency and compliance is encouraged. And react to deviations to make it clear that you care for the framework. If you get people onboard, they will also see the benefits and feel the comfort of a solid internal governance and control.

Another aspect is the “tone at the top”. If the board, CEO and management see the benefits of a well-functioning corporate governance framework and maintain it continuously then this will be a natural part of running the business for all people within the organization. You should see the framework as an asset you should invest in (time and resources) and lead by example.  

With the rapidly evolving regulatory landscape, how do you stay up to date with the latest compliance requirements and incorporate them into your organization's governance practices?

As a compliance consultant I monitor regulatory initiatives daily. Although I have signed up for numerous newsletters and notifications, I always start my working day scanning through some websites such as the one of Sw. FSA and the government. I also take part in various networks such as the compliance forum and of course get a lot of valuable updates and insights from my colleagues and our clients when it comes to news, trends and new and amended rules and regulations. At zeb we also have a great solution that is used both by us internally and by our clients, Regulatory Hub, that keeps track of both European and Swedish regulatory development.

When it comes to governing documents, what are some common challenges faced by companies in maintaining compliance? How can these challenges be overcome?

The rapid development of new regulations means that companies are updating and adding governing documents at a pace that can make the governance framework unclear, unnecessary complex and difficult to oversee. Moreover, I believe the significant challenge lies in ensuring that the governing documents adopted are both tailored to the company’s business and not overly technical, so they are possible to comply with and thus serve their intended purpose.

I think compliance functions and legal experts within an organization should provide guidance and interpretation regarding the external requirements that need to be addressed in various governing documents. However, the functions responsible, should preferably be the ones writing and updating the documents. A team of suitable reviewers should also be invited in the process to ensure that the changes in a specific governing document does not affect other areas of the company or other documents in a way that makes the framework unclear or contradictory.

Once documents are approved, they should be complied with, hence the changes or new requirements will require proper implementation. Here training is essential and so is explaining the purpose of the new or amended requirements. It is easier to ensure compliance if everyone understands the reason for the new procedure or task.

Based on your long experience within compliance, what advice would you give to legal-and compliance professionals who want to make a positive impact on corporate governance and drive better compliance practices within organizations?

I think it is key for a legal or compliance officer to have an in-depth understanding of the business and the products and services offered by the company. This makes it easier to provide accurate advice and to assess the impact of new and updated regulations. Understanding the business also builds trust and contribute to better discussions with the board, management, and colleagues. Be approachable to colleagues so that they feel that they can turn to you with compliance related questions. This ensures compliance in a proactive manner and provides comfort to the organization.

What are you most looking forward to this spring/summer?

I am looking forward to some change of scenery and spending quality time with my family and close friends.  

We all know that compliance can sometimes feel like navigating a labyrinth of rules and regulations. If you were to compare compliance to a popular board game, which game would it be and why?

I’m not a big fan of board games and avoid playing as best as I can, but what about “Jenga”? Try to keep it stable and don’t take too much risk…