The VU Compliance Newsletter

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1 The VU Compliance Newsletter Volume 1, Issue 1 November 12, 2008 Dear readers, Welcome to the first edition of the Compliance Newsletter produced by the Master of Corporate Compliance at the VU University in Amsterdam. Our Master program aims not only at providing high quality postgraduate education on compliance and integrity management but also at stimulating research, thought development, and dialogue in the compliance field. Given these various ambitions, we find it important to keep on informing our key stakeholders about the activities and thoughts developed by our students, our lecturers, and our curriculum itself. Our newsletter is bilingual both to mark our international orientation and to welcome Dutch and English speaking readers and contributors. We invite external contributors to write in our newsletter. If you are interested in launching a compliance-related discussion, or in reporting the findings of a compliance-related research, please consider this newsletter as a potential forum. This first newsletter introduces some key developments of our program and of its instructors. A number of interesting discussion areas are also introduced in this issue. To name a few: Should compliance activities be combined with legal and enterprise risk management and with Corporate Social Responsibility? Is a light version of COSO needed for middle sized financial institutions? Do hedge funds need a (stronger) compliance function? Does the Dutch real estate sector really have an integrity problem? We hope that you will let this newsletter distract you from the hectic of the day and from the financial / economic news. Yet it would be inappropriate to publish a newsletter at this time without any reference to the financial / economic crisis. While the foundations of our financial system are being challenged, compliance practitioners are faced with a number of key questions such as: How can we ensure that compliance professionals have a sound knowledge of products and marketing processes while remaining capable of thinking differently than their commercial colleagues? Should we (continue to) integrate the compliance function with other risk functions (credit risk, market risk) given that the established risk functions seem to have failed? Have risk management systems in some financial institutions become so quantitative that critical thinking has been neglected? How can we ensure that critical thinking remains / develops further within compliance management systems? How can the soft side of ethical reasoning be integrated into quantitative risk management systems? Can we seriously argue that all financial institutions have solid compliance risk identification systems / methods? How can we combine the local Table of Contents and global assessments of compliance risks? Curriculum News 2 Is it realistic to believe that the general public and governmental authorities will continue to believe in the strength of selfregulation in the financial industry? If self-regulation is Student News Lecturers News Curatorium News Research News questioned, should the principles based view of compliance also be questioned? I invite you to add to this list the questions that face you in your compliance role as a result of the current financial / economic developments. Let s discuss these questions with one another, and let s establish how compliance can play a role in developing stronger foundations for our financial system. Kind regards, Prof. dr. Isabelle Maignan Director of the VU Master of Corporate Compliance

2 The VU Compliance Newsletter Curriculum News Looking back on tour 2008 Compliance Day the business may have to contend with hundreds of regulators worldwide with substantial differences in approach, legal power and competencies H. Loewenthal and C. Gorter Page 2 On June 2 nd, 2008, the VU Master of Corporate Compliance organized a conference around the inauguration of Isabelle Maignan as Full Professor ( Hoogleraar ) of Corporate Compliance. About two hundred individuals attended the day. The core discussion topics of the conference are outlined below. Theme A. How can multinationals successfully manage Compliance? Heather Loewenthal (General Manager Compliance Risk Management of ING Group N.V. ) was the first to address this topic. She made a distinction between (i) the corporate culture and in particular the Tone at the top (ii) knowing and applying requirements and (iii) the framework, procedures and tools. Heather rightfully pointed out that managing compliance risk today is a license to operate tomorrow. In her view, compliance risk management should be fully integrated in the daily business activities and strategic planning. There are three principle objectives of compliance: (i) create a culture where staff do the right thing and speak out without fear (ii) know the rules so all can play to win and (iii) managing compliance risks in an organized way and transparent way. Carin Gorter (Head of Group Compliance at ABN AMRO Bank N.V.) stressed that successfully managing compliance is the responsibility of senior management. The main components of compliance in her view are: (i) setting clear values and strategy and continued testing of strategy, (ii) feeling for dynamics of its role in society (iii) oversight (big picture and holistic view) (iv) vision on risk (appetite) and (v) create a professional compliance organization and align strongly with Legal and Risk. The key drivers of a compliance mandate are according to Carin that it should be embedded in the organization, that it emphasizes the tone at the top and that it is able to review and adjust according to changing circumstances. According to Carin, the compliance cycle is a continuous journey, not in the least because the risks of the business change and the business may have to contend with hundreds of regulators worldwide with substantial differences in approach, legal power and competencies. Audience discussion led by Peter Wakkie (Executive vice-president and Chief Corporate Governance Counsel, Ahold) around three topics: In order for compliance in a multinational organization to be effective, it should be combined with legal and enterprise risk management and possibly also corporate social responsibility. This implies that the person heading compliance should also be the chief legal officer and the person monitoring the enterprise risk management program. In the audience, there was consensus that compliance should be closely aligned with Legal and Enterprise Risk Management but that this should not necessarily mean that all these disciplines should be headed by the chief legal officer or the compliance officer. This was definitely an option but another option is to have the disciplines headed by different persons who together form a coordinating committee. Compliance can only work in a multinational organization if senior management, including the executive board and the supervisory board, are trained continuously in matters of integrity and are constantly reminded of the values that the company believes in and the principles laid down in the company s code of conduct. There was definitely consensus in the audience that the tone at the top is an important, if not the most important, ingredient of a proper compliance program and that this inevitably means that senior management must be constantly reminded of

3 the values of the business and trained in matters embedded in the company s code of conduct. An essential part of international compliance management is that training and guidance is provided to the senior executives of the company about the extraterritorial scope of various laws and regulations of the United States (e.g. the Foreign Corrupt Practices Act) because of the grave consequences (monetary and otherwise) in case there are violations of such laws and regulations. The consensus in the audience was that definitely this is an area which requires a lot of attention and that the present awareness in European companies is not always at the required level regarding the extraterritorial scope of the laws and regulations of the United States. Theme B. Can supervision be a Competitive Factor in the Internatio- nal Financial Sector? Arnold Schilder (Ececutive director, De Nederlandsche Bank) sketched the major challenges for supervisors in this field. He made a distinction between factors which contribute in a positive way to supervisory competition and factors which contribute in a negative way to supervisory competition. The positive factors are a service orientation as opposed to a supervisor who is internally oriented and a principle/risk based approach as opposed to a rule/ history based approach. High scores on the dimension service orientation and on the dimension principle/risk based approach lead to a higher quality of supervision and are at the same time attractive for financial institutions. This is not the case with negative factors such as reduction of discipline, a race to the bottom in regulation or an inflexible rule based approach in combination with inadequate resources. High scores on these factors will lead to a reduction in quality and discipline and imply for a country which follows this strategy a loss of quality brand. Schilder recognizes the benefits of supervisory competition but these benefits should in his opinion be found in better supervisory practices. In this regard he mentioned first of all better quality of service. Important aspects of better service are predictability, short response times and user friendly language. From his experience achieving these goals requires persistent and continuous internal efforts combined with an ongoing dialogue with supervised entities. The focus should be on real arguments and on effective communication where the supervisor should be willing to sell his arguments. A second key factor is stimulating innovation. Regulation and supervision should not be backward looking but should be based on a thorough risk analysis and at the same time leaving room for innovation and new service approaches. This open minded approach of the supervisor requires a high degree of transparency on the side of the supervised entity ( Open Book approach ). He concluded with stating that professional supervisory competition challenges innovation, improves service quality and adds to reputation as a financial center. It should however never compromise on contents of supervision and disciplinary enforcement. Paul Wright (International Strategy and Policy coordination, FSA) commented from his experience at the Bank of England and later at FSA. He first sketched the FSA attitude to competition. The competitive position of the UK financial industry is not a statutory objective of FSA; however FSA must have regard to the competitive position and minimize adverse effects on competition. FSA is committed to scrupulous application of EU directives; it is not in the business of creating national champions. FSA does not believe in a mercantilist approach to financial services. On the contrary, FSA is sometimes blamed for super equivalence although it applies a comply or explain principle and a peer Volume 1, Issue 1 A. Schilder, J. Frijns and P. Wright Important aspects of better service are predictability, short response times and user friendly language. P. Wright Page 3

4 The VU Compliance Newsletter Supervisors should seize the opportunity to learn from one another but the supervisor should never compromise on basic standards. Competition in the form of a race to the bottom is self defeating. Page 4 Curriculum News review to ensure equivalent application. In his opinion the discussion on supervision as a competitive factor could win from a closer look at the available empirical evidence. He presented the results from a comparison between the UK and the US and some evidence from the EU. The Global Financial Centers Index rates financial centers on 5 factors, including regulation, infrastructure, people, market access and general competitiveness. London and NY are the two leading centers. London is ahead of NY in all categories but the lead is slipping due to issues regarding banking supervision in London and a diminishing effect of Sarbanes Oxley. Personal taxation is a major irritant in the UK. Looking at evidence from IPO s (initial public offerings), Wright observes that the recent success of London has more to do with deep and liquid markets and required levels of disclosure than with quality and strictness of enforcement. Traditionally a policy of credible deterrence is very important in the UK. With regard to the competitive position of the UK vis à vis the other EU countries several case studies can be mentioned which look at wholesale insurance, banking, asset management and listings. The findings are rather diverse. In many cases regulation was mentioned by firms to move away from the UK but not as predominant driver. Taxation seems to be much more important. Anyway there is no evidence of a movement to materially weaker jurisdictions. In line with the comments by Arnold Schilder, Paul Wright stressed the importance of finding the right balance between principles and rules. Having the right balance contributes to better supervision and can add to the competitive position. However he noted that on this issue there is some schizophrenia in firms: managements like it whe- reas compliance don t like it. The move towards a more principle/risk based approach, as adopted by FSA, requires a reconfiguration of compliance and it involves some legal uncertainty. In his opinion the benefits in the form of alignment with internal systems and greater use of industry codes etc outweigh the costs. Paul Wright concluded by stating that supervisors should be challenged regarding their approach. Continuous and open evaluation is useful. Supervisors should seize the opportunity to learn from one another but the supervisor should never compromise on basic standards. Competition in the form of a race to the bottom is self defeating. Audience discussion led by Jean Frijns (Chairman Monitoring Committee Dutch Corporate Governance Code) around three topics: A central EU objective is fast integration of national financial markets with their local regulatory and supervisory regimes. The best way forward seems to be standardization through EU directives which by nature are more rules than principles based. This limits the room for a principle/risk bases approach. The competitive position of the financial sector depends to a large extent on the success of the individual financial institutions; weak companies are likely take-over candidates in an European and even global consolidation trend. Supervisory competition seems then relatively unimportant as long as supervisors stick to a nonmercantilist attitude. More attention for the benefits of supervision was asked; these are highly visible in the area of the competition authority but also in the area of financial supervision the benefits in the form of trust in the markets and consequently lower transaction costs are very important.

5 Theme C. Does Corporate Complian- ce deserve a seat at the university? This was the title of the inaugural speech of Prof. Dr. Isabelle Maignan who evaluated whether Corporate Compliance can already be seen as an academic discipline. In the process of examining this question, Isabelle discussed the nature of compliance relative to related disciplines. Some extracts of her speech are outlined below: On the subject matter of Compliance. In short, thus far, I have advanced the following main points about Compliance: A. The concept of Organizational Compliance should be favored over that of Corporate Compliance. B. The purpose of Organizational Compliance is to minimize violations of applicable norms. C. Organizational Compliance is interested in the market, the organization, and the individual as units of analysis. D. The nature of the norms that fall within the scope of Compliance may vary from one organization to the next. E. Compliance activities consist mainly in translating applicable norms into organizational behavior. [See Figure 1] behavior. As with the translation from one language to another, there usually are several potential ways of translating applicable norms into organizational behavior. Accordingly, as emphasized earlier, Organizational Compliance requires much interpretation of norms, and much creativity in the implementation thereof. I. Maignan Volume 1, Issue 1 The complete inaugural speech of I. Maignan can be found at (Postgraduate School/ Corporate Compliance/Events) Based on the arguments above, I suggest that the subject matter of Organizational Compliance is the translation of applicable norms into organizational On the relationship between Compliance and Enterprise Risk Management. From a practical viewpoint, one should be wary of the current trend consisting in applying risk management techniques developed in the credit or market risk areas to the Compliance field. Traditional risk management assumes that the probability of occurrence of risks can be established, that the impact of these risks can be predicted in financial terms, and that quantitative risk tolerances can be established. It is simply unrealistic to make the same assumptions about Compliance risks. There is to date little research to speak of that identifies the probability of specific Compliance incidents. For example, there is no model that enables to assess based on a number of variables (e.g., number of employees, years of trading experience, gender) the probability that a trader will engage in front running. Similarly, there is hamper research that links specific violations of relevant norms to financial consequences. For example, there is no model that establishes any form of relations- Page 5

6 The VU Compliance Newsletter it is premature to assert with full confidence that Organizational Compliance qualifies as an academic discipline because of significant overlaps with the subject matter of Business Ethics. Audience during the Compliance day Page 6 Curriculum News hip between the occurrence of insider trading on the part of a business unit manager and the resulting material costs for the organization. As a result, the proper quantification of the probability and impact of Compliance risks is not feasible, and the determination of compliance risk tolerances is out of reach. Given this lack of empirical evidence and reliable models about the probability and impact of non-compliance, it is in my view premature and essentially inappropriate to attempt to apply ERM techniques to Organizational Compliance. Yet, many organizations are currently in the process of integrating their risk functions --including Compliance-- and of standardizing their practices around the ERM approach. As a result, across the Compliance industry, we can observe the spreading of beautiful compliance risk footprints and Compliance reporting formats. In there, diverse compliance risks are assigned simple colors (from the envied green to the feared red) based on their expected likelihood (usually measured in likely frequency per year, five years, ten years) and their expected financial impact measured in thousands of euros. Given the lack of quantitative research on Compliance phenomena, such appealing instruments require Compliance professionals to actually guess the likelihood and impact of risks. I admit that it is appealing to be able to tell Management here is the mapping of your Compliance risks, look you are doing OK, almost everything is green. Yet, I doubt that Compliance professionals at this stage feel comfortable about their own work when they show these types of risk maps, knowing that they essentially guess colors based on few comforting arguments. I doubt that these risk maps truly help Management understand and appreciate the nature of Compliance. And most importantly, I fear that such instruments, at this point of time, cannot possibly provide any reliable presentation of the actual risks encountered by an organization in terms of Compliance. Therefore, let me advocate a move away from such oversimplified risk mapping systems, and let me argue in favor of reporting systems that do not focus on likelihood and impact of risks, but on the concrete actions that have been taken to minimize violations of the norms relevant to the organization. Based on the classification of Compliance activities discussed earlier, I suggest that Compliance professionals can provide a sound picture of the state of Compliance in their organization by answering three key questions: (1) to which extent have the norms applicable to your business been translated into organization-specific norms? (2) to which extent are organization-specific norms implemented into organizational processes? and (3) which activities are in place to make relevant norms highly visible to individual organization members, and to advise individual employees on specific compliance related decisions?. Is Organizational Compliance an academic discipline? We now have reached the point where we can provide an answer to our central question: Can Compliance be considered as an academic discipline? So far, I have argued that : (1) Organizational Compliance has a clear subject matter defined as the translation of relevant norms into organizational behaviors, (2) we can seriously assume the existence of underlying uniformities and regularities among the phenomena that make up the subject matter of Compliance, and (3) we can expect the scientific method to be applicable to the study of Compliance phenomena. Yet, it is premature to assert with full confidence that Organizational Compliance qualifies as an academic discipline because of significant overlaps with the subject matter of Business Ethics.

7 Our curriculum and the DSI register Volume 1, Issue 1 Some of our stakeholders have asked us why the VU Master of Corporate Compliance will no longer be on the Dutch Securities Institute (DSI) Register of Compliance Professionals. The DSI had unilaterally placed the VU Master of Corporate Compliance in its temporary register in However, the management of our program has chosen not to be part of the register. Given that the register sets only minimum requirements to enter the compliance field, and given that our curriculum educates experienced compliance professionals, it is of no value for our graduates to be listed in the DSI register. Student News Congratulations to our 2008 graduates! The following students have successfully completed the curriculum in June 2008: Bouke Boelens (ING Bank), Jean-Louis Brunet de Rochebrune (Rabobank International), Dave Coenen (De Nederlandsche Bank), Alex Degeling (Phanos N.V.), Danny van Dijk (Autoriteit Financiële Markten), Marike Dokter (ING Corporate Operational Risk Management), Jan Doornbos (DBV Levensverzekeringsmaatschappij), Rijk Griffioen (Stichting Pensioenfonds IBM), Michel Harmsen (ING Bank), Arthur de Hart (Corus Staal B.V. ), Martine Hemmes (De Nederlandsche Bank), Roger Koch (Fargo Consultancy B.V.), Menno Kok (ABN AMRO Asset Management), Johan Koopmans (De Friesland Zorgverzekeraar), Frank van der Linden (Global Equities Trading), Gerda Mooij (ABN AMRO Bank N.V.), Ben Moolenbeek (IMC B.V.), Harry van Overbeek (Eureko Achmea Holding), Marielle Steeghs- Versteegen (ING), Stephan Stuijvenberg (Van Lanschot Bankiers N.V.), Victor Valckx (Price Waterhouse Coopers), Wim van der Velden (ING), Christiaan Visser (ING), Ellen Wertenbroek (Price Waterhouse Coopers), Sander Willems (Price Waterhouse Coopers), Han Zevenhuizen (Deloitte). Thesis highlights 2008 All of our students need to write a thesis at the end of our curriculum. The authors of three theses tell us about their work in the sections below. Title thesis: A Compliance function for Hedge Funds: A Burden or Added Va- lue? Author: Ben Moolenbeek; Supervisor: R.A.M. Houben (Deloitte). Hedge funds are not, compared to banks and brokers, regulated intensively. In the USA however, there is a clear tendency that hedge funds are being regulated more intensively than they were in the past. Furthermore, a flow of incidents has resulted in a negative image and has affected the reputation of the sector. This has resulted in the awareness of the branch of the need and benefits of a function capable of managing the compliance risks internally. As a result, it is an opportune question to ask whether hedge fund and/or hedge fund managers should prepare themselves by installing a compliance function. On the one hand, in anticipation of the future tighter and on the other hand, the possibility to realise a compe- Ben Moolenbeek Ben is currently employed by IMC, a financial group specialized in marketmaking, proprietary trading, asset management and banking. As the Group Compliance Officer he is ultimate responsible for all compliance related matters. Page 7

8 The VU Compliance Newsletter Student News Page 8 Stephan Stuijvenberg Stephan Stuijvenberg is sinds 2004 Group Compliance Offcier bij Van Lanschot Bankiers N.V. en in die hoedanigheid bezig met wetgevingstrajecten (gap/impact analyse en implementatie), zoals momenteel de Wwft (wet ter voorkoming van wittwassen en financieren van terrorisme) en PSD (Payment Service Directive). titive advantage to other hedge funds in the market. In my analysis I evaluate how hedge funds should approach the tendency of tighter regulation and the growing scepticism of the investing world. Through anaysing some current incidents in which hedge funds were involved as well as analysing the regulatory landscape, I came to an overview of the most important compliance risks and needed mitigating control measures. In my opinion this analyses resulated in the conclusion that a compliance function actually will result in improved operations that in turn will improve the profits instead of considering it as an extra and unnecessary full time equivalent (fte). In my opinion, hedge funds are not fundamentally different from other financial institutions and thus should be regarded as such. Therefore, a strong and efficient implementation of rules and procedures should be implemented to preserve (market) integrity. However, the focus should be on the lower tier of hedge fund clients. These small investors are less experienced and less informed on these types of investments. They need to be protected by external rules, but moreover they must be able to rely upon a hedge fund that actively monitors the compliance risks. The compliance function should protect the investors in the fund in the event that the fund does not meet certain basic investor qualification and investor protection requirements such as: Minimum investor qualifications above current accredited investor levels (addresses retailisation issue). Custody of private investment fund assets in a broker-dealer or bank and compliance with interpretations on constructive custody (addresses misappropriation of assets, fraud and transparency issues). Annual audit and delivery of financial statements to investors (addresses fraud and transparency issues). Quarterly unaudited financial reports to investors (addresses transparency issue). Clear disclosure of financial arrangements with interested parties such as investment manager, custodian, prime broker, portfolio brokers, placement agents and other service providers, both in terms of description and with some periodic historic quantification of amounts paid to each category and benefits received (addresses conflict-of-interest, transparency and fraud issues). Clear disclosure of investment allocation policies (addresses conflict-ofinterest, transparency and fraud issues). Clear, objective and transparent valuation standards, that are clearly disclosed, not stale, and subject to audit, for use in calculating current unit values for investor reports, admissions and withdrawals and calculations of performance and volatility information (addresses valuation, transparency and fraud issues). Title thesis: De naleving van best practi- ce bepaling II.1.4. van de Corporate Governance Code bij een middelgrote financiële instelling. Author: Stephan Stuijvenberg (Van Lanschot Bankiers N.V.) ; Begeleider: Drs. R. van Altena RA (KPMG). Een beursgenoteerde onderneming dient zich te houden aan de Nederlandse Corporate Governance Code. Een van de best practice bepalingen uit deze Code is best practice II.1.4. Een onderneming verklaart in het jaarverslag dat de interne risicobeheersings- en controlesystemen adequaat en effectief zijn en geeft een duidelijke onderbouwing hiervan. Om de opzet en de werking van de interne risicobeheersings- en controlesystemen na te gaan, zijn een aantal modellen voor interne beheersing voor handen, waaronder COSO I en Enterprise Risk Management (ERM). Voor een middelgrote financiële onderneming kan het werken conform deze modellen een brug te ver zijn. Een modelmatige oplossing van interne beheersing kan als een grootbankoplossing worden gezien en niet passen bij de inrichting van de

9 interne beheersing bij een middelgrote financiële instelling. Bestaat er zo iets als een COSO light versie? Uit een onderzoek in de jaarverslagen 2006 van 12 met Van Lanschot Bankiers N.V. vergelijkbare financiële instellingen, blijkt dat 11 instellingen een risicoparagraaf in het jaarverslag opnemen waarin bij 6 daarvan melding wordt gedaan van het gebruikte model: ROB (2), COSO I (1), ERM (3). Geconstateerd kan worden dat middelgrote financiële instellingen best practice bepaling II.1.4. over het algemeen goed naleven. Als uitvloeisel van Sox-regelgeving in de Verenigde Staten, hebben in 2003 een aantal Nederlandse ondernemingen met een beursnotering aldaar, samen met het Instituut van Internal Auditors Nederland (IIA) naar de Company Level Controls gekeken als praktisch raamwerk om de controlemaatregelen binnen de onderneming te onderzoeken. Het raamwerk bestaat uit 29 controle items (vragen). Door middel van een gap-analyse, uit te voeren onder relevante business units, wordt in betrekkelijk korte tijd de mate van interne beheersing in de organisatie duidelijk. Opvallend is dat PriceWaterhouseCoopers het volgende opmerkt: Company Level Controls generally relate to the softer COSO components (control environment, information and communication, monitoring and risk assessments). Definieer je soft als light, dan is daarmee mogelijk het doel bereikt. Een referentiemodel kan nuttig zijn om de risicobeheersings- en controlesystemen in kaart te brengen, maar het is niet nodig om naar enig model te verwijzen, zolang de risicobeheersing van de onderneming maar te overzien is. Dit is van belang om in het jaarverslag een in control statement af te kunnen geven. Titel scriptie: Ethiek in het Vastgoed. Author: Alex Degeling. Begeleider: Prof. Dr. E.J.J.M. Kimman. Vastgoed en ethiek lijken begrippen die niet met elkaar verenigbaar zijn. Sinds mensenheugenis wordt vastgoed vereenzelvigd met misbruik. Reeds in de Griekse Oudheid was er sprake van machtsmisbruik met vastgoed als onderliggende waarde. Ethiek wordt wel omschreven als de filosofie van het juiste handelen. Dit laatste lijkt op gespannen voet te staan met vastgoed. De scriptie Ethiek in het Vastgoed beschrijft het onderzoek naar wat er mis gaat in de vastgoedsector, waarom het mis kan gaan, wat er kan worden gedaan om misstanden zoveel mogelijk te voorkomen en welke rol de Compliance Officer daarbij kan vervullen. Hoe is het gesteld met het ethisch gehalte van de Vastgoedsector? De perceptie heerst dat het met de ethiek in de vastgoedsector niet goed gaat. Dat normen en waarden met voeten worden getreden. Het slechte imago van de vastgoedsector komt voort uit misbruik. Misbruik van het eigendomsrecht maar vooral misbruik van vertrouwen. Dit alles heeft te maken met integriteit. De integriteit van een onderneming wordt bepaald door de integriteit van de mensen die er werken. Integriteit betekent dat mensen: (a) besef hebben van waarden en normen; (b) respect en oog hebben voor de belangen van anderen; (c) onkreukbaar zijn: zij geven hun waarden niet zomaar op als dat hen toevallig goed uitkomt; (d) consistent en transparant zijn in woord en daad: zij doen wat zij zeggen en zeggen wat zij doen. Internationale onderzoeken tonen evenwel aan dat de transparantie van de Nederlandse vastgoedsector zo slecht nog niet is. Wereldwijd staat Nederland op een fraaie zevende plek en binnen Europa blijft alleen het Verenigd Koninkrijk ons voor. Het beeld wordt dus duidelijk geschapen door incidenten. Hetgeen overigens deze incidenten niet minder ernstig maakt. Hoe aan te pakken? Zelfregulering of wetgeving met toezicht? Wetten zijn niet in staat waarden weer tot leven te brengen; meer wetten doen daar zelfs afbreuk aan (de letter regeert in plaats van de geest ). Meer wet- en regelgeving heeft echter ook grote nadelen. Uiteindelijk leidt dat tot gedrag van mensen dat gebaseerd is op de vooronderstelling dat zolang iets niet uitdrukkelijk verboden is, het dus mag. Ook calculerend gedrag wordt zo bevorderd. Daarmee wordt de weg vrij Volume 1, Issue 1 Internationale onderzoeken tonen evenwel aan dat de transparantie van de Nederlandse vastgoedsector zo slecht nog niet is. Wereldwijd staat Nederland op een fraaie zevende plek en binnen Europa blijft alleen het Verenigd Koninkrijk ons voor. Alex Degeling Alex was voorheen werkzaam bij MeesPierson als o.a. als fiscaal adviseur, hoofd fiscale zaken, en finance manager. Sinds 2005 is hij werkzaam bij Phanos NV als Compliance & reporting officer. De functie van Compliance & Reporting is een nieuw fenomeen binnen Phanos. Page 9

10 The VU Compliance Newsletter Student News gemaakt tot marchanderen met de eigen verantwoordelijkheid, het eigen normbesef, en verdwijnt de waarachtigheid naar de achtergrond. Zelfregulering laat ondernemingen en brancheorganisaties een zeker mate van vrijheid om de zaken zelf te regelen. Door middel van gedragscodes moet een integere bedrijfsvoering in de onderneming worden verankerd. Essentieel is een wijziging van de cultuur in een onderneming. Een schriftelijke code kan een waardevol hulpmiddel zijn om integriteit te verankeren in de bedrijfscultuur en zo criminaliteit en malversaties te voorkomen. Bedrijven kunnen zo meer expliciet hun waarden en normen formuleren. Welke rol kan een Compliance Officer vervullen bij het tot stand komen van een verantwoorde bedrijfscultuur? Het hoofddoel van de compliance functie is te definiëren als het bevorderen en waarborgen van de integriteit van de organisatie en de in die organisatie functionerende medewerker. Dit is in de vastgoedsector niet anders dan in de financiële wereld. Een Compliance Officer kan een belangrijke rol vervullen bij het op het rechte pad houden van de organisatie. Voor een succesvolle invulling van zijn functie moet mijns inziens de Compliance Officer zich vooral richten op educatie en preventie. Succesvolle veranderingen komen van binnenuit en kunnen nooit van buitenaf worden opgedrongen. Het teweegbrengen van een cultuuromslag in zowel de organisatie sec als de gehele sector moet het doel zijn van de Compliance Officer. Lecturers News Welcome to our new lecturers! Yvonne Burger Our Master of Compliance is becoming more international, more researchoriented, and less focused on the financial sector. We are delighted that the following experts have agreed to support these developments by lecturing for the first time in our curriculum in 2008: Mr. H.J. Biemond (Allen & Overy) is lecturing on extra territorial regulations. Prof. dr. Y.D. Burger (VU en Burger Consultancy) is leading a series of lectures on change management and conflict management. Drs. R.F. de Groot AA RA (KPMG) is providing expertise on the handling of compliance incidents. Mr. James Joy (Ahold) is lecturing on the challenges associated with the management of compliance across boders Prof. dr. M. Kaptein (KPMG en EUR) is giving a series of lectures on (1) employees as a compliance risk, (2) setting up compliance procedures and policies, and (3) setting up a solid compliance orgnization. Mr. Q. Kroes (Allen & Overy) is telling our students about privacy regulations and the ensuing challenges for compliance professionals. Prof. dr. S.G.van der Lecq (NMA en EUR) is lecturing on anti-trust requirements and is also leading a session on the writing of a solid thesis. Dr. Jorna Leernheer (Oeso) is giving thesis lectures on research methodologies. Mr. W.H. J.M. Nuijts and mr. M.A.A.Khan (DNB) discuss the structure and nature of superviros in an international context. Page 10

11 Volume 1, Issue 1 Of course, our established lecturers continue to act in the program. These lecturers include: Mr. J. Italianer (NautaDutihl) and Prof. Mr. E. du Perron (UvA). Lecture on Duty of Care and Market Abuse. Mr. Drs. M.J. Blotwijk (Autoriteit Financiele Markten). Lecture on supervision in the Dutch financial industry. Prof. Dr. R.J.M. Dassen (Deloitte). Lectures on Enterprise Risk Management. Prof. Dr. J.M.G. Frijns (Cie Corporate Governance Monitoring). Lectures on the economy of compliance. Mr. R.A.M. Houben (Deloitte). Lectures on customers as a compliance risk, on the compliance organization, and on conflicts of interests. Prof. Mr. J.B.Huizink (VU). Lectures on business law and compliance). Prof. dr. E.J.J.M. Kimman. Lectures on Business Ethics Mr. A.W.H. Docters van Leeuwen (Holland Financial Center). Lecture on CSER. Mr. M.J. van Woerden (ABN-AMRO). Lecture on conlficts of interests.. Welcome to our Content Coordinator! De Corporate Compliance opleiding aan de VU is zeer verheugd te kunnen melden dat met ingang van 15 november a.s. Richard Bakkers de opleiding 1 dag per week inhoudelijk zal komen versterken in de hoedanigheid van coördinator/ docent. Richard Bakkers (36) studeerde Bedrijfswetenschappen aan de Radboud Universiteit Nijmegen, afstudeerrichting Bedrijfskunde. Richard is zijn carrière begonnen bij de Stichting Toezicht Effectenverkeer (later: Autoriteit Financiële Markten), waar hij 5 jaar werkte als teamleider van een toezichtteam. Vanaf 2003 werkte hij bij Insinger de Beaufort (private bank en asset manager) als Group Compliance Manager. Vanaf Other lecturers news 2005 werkte Richard bij ING Groep als SeniorCompliance Officer Corporate Compliance Retail Banking/Direct Banking. Vervolgens werkte hij 2 jaar voor Protiviti, een risk management consultant, waar hij medeverantwoordelijk was voor het opzetten van de Compliance dienstverlening. Sinds maart 2008 is Richard verbonden aan Certa Legal. Hij is mededirecteur van de groep en verantwoordelijk voor de dagelijkse gang van zaken binnen Certa Legal Compliance, samen met mede-oprichter Marten Renes. Richard woont in Amsterdam samen met Anouk en zij hebben een zoontje, Juup, van ongeveer 6 maanden. Richard Bakkers Raf Houben has joined Deloitte Enterprise Risk Services in August Raf was previously working among others by Bank of America NA, SNS Reaal N.V., en De Nederlandsche Bank. By Deloitte, Raf offers services to both Financial and non-financial businesses in the areas of Governance, Risk, and Compliance. Page 11

12 The VU Compliance Newsletter Lecturers News Fieke van der Lecq Isabelle Maignan has left ING and has joined the Autoriteit Financiële Markten as of 1/09/2008. Fieke van der Lecq is per 1 september 2008 benoemd tot deeltijds bijzonder hoogleraar Pensioenmarkten aan de Erasmus School of Economics te Rotterdam. Om het onderzoek naar de voordelen en beperkingen van marktwerking in de pensioensector te stimuleren, levert Cordares een bijdrage aan de bekostiging van deze leerstoel. Cordares ondersteunt het onderzoek naar de voordelen en beperkingen van marktwerking in de pensioensector, in Curatorium News de verwachting dat hiermee de sector als geheel beter gaat functioneren. In samenhang met de uitvoeringspraktijk moet onderzoek aantonen hoe marktwerking positieve effecten kan hebben op de pensioensector en hoe negatieve effecten te vermijden zijn. Fieke van der Lecq combineert de functie van onderzoeksmanager financiële sector bij de Nederlandse Mededingingsautoriteit met de deeltijdleerstoel aan de Erasmus School of Economics. Joost Italianer Welcome Welcome to to JOs Joost Italianer! Italianer! Joost Italianer has just joined the VU Master of Corporate Compliance curatorium. Joost is partner at NautaDutilh. Joost focuses on criminal law, banking and securities law and regulatory matters. He frequently advises on anticorruption (FCPA) issues and is involved in internal investigations. He is regarded as an expert on insider trading law, market abuse and related issues. He has advised and represented leading banks, financial institutions and individuals in the financial sector in matters concerning criminal law and regulatory aspects of banking and securities law. in 1983 and became partner in Joost is a frequent speaker at seminars and courses on market abuse and has published a number of articles on insider trading and other white collar crime topics (e.g. in Butterworths Money Laundering Law). He is a member of the Advisory Commission on Criminal Law of the Netherlands Bar Association, which advises the Minister of Justice on new legislation. Furthermore Joost is a deputy judge at the Haarlem District Court. Joost is a board member of the Lawyers for Lawyers Foundation. De belangrijkste taak van een compliance officer is om een zodanige cultuur in een organisatie te creëren dat iedereen het vanzelfsprekend vindt dat er regels zijn waar men zich aan dient te houden, zonder dat men het gevoel heeft dat er sprake is van bureaucratie. Page 12 Joost graduated from Groningen University in He joined NautaDutilh E. van de Merwe vertelt ons over zijn visie op Compliance De compliance-afdeling binnen een bedrijf wordt vaak gezien als een politieagent die erop let dat de regels niet overtreden worden en als dat wel zo is, dan onmiddellijk de gele kaart trekt. Dit is jammer, want een goede compliance -afdeling werkt niet zo. De belangrijkste taak van een compliance officer is om een zodanige cultuur in een organisatie te creëren dat iedereen het vanzelfsprekend vindt dat er regels zijn waar men zich aan dient te houden, zonder dat men het gevoel heeft dat er sprake is van bureaucratie. Het gaat dus om het creëren van een gedrag. Daarbij is de tone at the top uiteraard van essentieel belang. Als de compliance officer met een programma bezig is om de medewerkers te overtuigen van een bepaald gedrag maar de top geeft verkeerde voorbeelden, dan wordt het voor de organisatie uiteraard zeer moeilijk om het zich houden aan regels vanzelfsprekend te vinden. Dus

13 Volume 1, Issue 1 het management heeft een voorbeeldfunctie en het management dient dus bij voortduring het belang van een goede compliance uit te dragen. Erik van de Merwe maakte carrière als bankier bij achtereenvolgens ABN en MeesPierson. Na verkoop van Meespierson aan Fortis in 1997 werd hij uiteindelijk directievoorzitter van Fortis Bank Nederland. Vanaf 2000 heeft hij zich toegelegd op advieswerk en commissariaten. Sinds 2005 is de heer van de Merwe lid van het curatorium van de postgraduate opleiding Corporate Compliance aan de VU. Research News Research Publications Prof. dr. M. Kaptein just published a new book: The Living Code, published by Greenleaf. 176 pp, paperback ISBN Synopsis: Of the 200 largest organisations in the world, more than 80% currently have a corporate code of conduct. An ever larger number of smaller organisations also have a code or are in the process of developing one. A business code is an important measure for compliance. Unfortunately, many codes are underutilised. And many simply fail, with serious repercussions for the organisation. This book presents a model to create, develop and embed business codes. The validated model enables managers and organisations to better manage their codes as well as their performance. The book describes why a code of conduct is necessary, what it should cover, as well as demonstrating through practical tips and examples how to make full use of it. Prof. dr. I. Maignan is one of the 49 (!) co -authors of the paper entitled Ethical Preferences for Influencing Superiors: A 41-Society Study to be published in early 2009 in the Journal of International Business Studies. Research in progress The VU Master of Corporate Complian- ce is organizing together with Deloitte and with the collaboration of the DNB a symposium on the theme Compliance: een nieuwe of vernieuwde discipline? on March 9, Thought leaders in the Compliance field will be invited to debate and establish the domain of the compliance function relative to that of related functions. Invitations will be sent in the coming weeks. Judith van Erp (EUR) is conducting research on the impact of violations of regulations on reputation. Judith has invited alumni and current students of the VU Master of Corporate Compliance to participate in her research. The VU Master of Corporate Complian- ce is conducting a research project in collaboration with KPMG on the nature and means of compliance functions across borders. Results are expected in the Spring of Page 13

14 Vrije Universiteit Posgraduate Master of Corporate Compliance De Boelelaan 1105, kamer 1 E HV Amsterdam For more information on our curriculum or on this newsletter, please contact: Mw. Drs. I.E. Hamming or dhr. Drs. E. Erbé T (020) F (020) E compliance@feweb.vu.nl