Questions Compliance Officers Should Ask Before This Big Promotion
In a document filed by the SEC on Tuesday, Zurich-based Credit Suisse Group SA said it had written off $ 4.7 billion in bad debt, and Lara Warner, chief risk and compliance officer, had “resigned” from his duties on the board of directors effective that day and left the bank.
The bad debts went to a US family-owned hedge fund called Archegos Capital Management and a UK supply chain finance firm called Greensill Capital. Archegos collapsed and Greensill filed for insolvency.
Credit Suisse’s board said it had activated its “tactical crisis committee” and launched “two investigations, to be conducted by external parties, into the issue of supply chain finance funds and the major deal for US-based hedge funds ”.
Brian Chin, head of the investment bank, will be leaving the bank at the end of April.
Chin and Warner are not charged with anything. And this article is not about who is to blame at Credit Suisse or what anyone did or did not do.
But Warner’s abrupt departure this week raises a hypothetical question: If you are offered a risk and compliance leadership role, how should you react?
A little background.
According to her now-deleted company bio, Warner, 54, became Chief Risk Officer of Credit Suisse Group in 2019 and, in August 2020, added compliance to her title.
The dual Australian and American citizen joined the bank in 2002 and has been a member of the management board since 2015.
She started in research, became CFO of the investment bank in 2010 and CEO of this unit in 2013.
She moved to the parent company’s compliance and regulatory affairs in 2015.
Until Tuesday, his resume shows a series of apparent successes. Anyone would celebrate a similar business path.
But when an internal promotion or transfer means moving from operations to compliance, there are questions to ask:
- Can I function as a company custodian?
- Will I have enough independence and skepticism to say no?
- Can I stand out from the C-suite when I need it?
When an insider – a team player for many years, say – is offered a job as a goalkeeper, his professional life must change.
Corporate gatekeepers, while effective, are not popular. The veto they typically hold over the C-suite, and their alignment with regulators’ expectations, sets them apart. Strong guardians are natural targets for resentment and opposition.
Some people can handle this. Others can’t.
Something went wrong at Credit Suisse, ending with Tuesday’s $ 4.7 billion hit. Did it have anything to do with Lara Warner’s performance as a Risk and Compliance Officer? I do not know.
Nonetheless, anyone promoted outside of operations and into risk management and compliance, especially to a senior level position, should be asking themselves tough questions.
Asking before the promotion is so much better than waiting after.