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What is "designing compliance”?
1 Creation of "compliance management" by management
The era in which the Financial Services Agency (FSA) provides financial institutions with guidelines and manuals for building specific compliance systems has already come to an end when inspection manuals was abolished. In addition, the flow of international demands on financial institution managers is shifting to the realization of management based on the self-discipline of managers rather than strict regulatory compliance.
In other words, in the compliance and risk management at financial institutions from now on, the management needs to escape from the idea that it is good enough to build a compliance system based only on the FSA's supervisory guidelines and laws and regulations. Then, it is required that the top management considers their own business model and management philosophy, observes social norms and morals, responds to the trust of stakeholders, maintains the fairness of the market, and pays attention to the public interest to create a new compliance.
2 Definition of "design"
To that end, it is necessary to rethink compliance from "things to build" to "things to design." So, what does it mean to "design" compliance? To explain that, we need to start by clarifying the definition of what "design" means in the first place. When you think of "design", you easily imagine that it forms something with an appearance, but if you analyze the original meaning of the word "design" from the etymological point of view, it becomes "de = negation + sign = indication". It leads to the meaning of "denying and destroying things existed." And the word design is derived from the Latin word “designare”, which also means "to signify what you have planned." In addition, the Japanese word "dezain or design", which is an imported Western language, is sometimes referred to as "Zuan or pattern" or "Ishou or idea".
3 Fostering a healthy corporate culture
Therefore, "designing compliance" means that the management themselves takes the initiative in denying and destroying the "existing compliance" that was caught only in the form of regulatory compliance, and that the management considers the company's business model, strategy, and the philosophy, etc., and embodies his original compliance with his or their own ideas to create their own corporate culture among officers and employees.
Even if you simply decide on an internal management organization or rules to comply with the FSA inspection and try to make them observe them, the important things will be missing. It is “satisfaction” and “security” for officers and employees. Even if top management says only the subject (all talk and no do) without taking the initiative in implementing it, officers and employees will see through their true intentions, anticipate what they are thinking and never follow them in the field of daily work. On the contrary, if the top management themselves is doing what they say, the officers and employees in the company will be relieved, convinced and obey it. In other words, compliance will be observed and a healthy corporate culture will be cultivated.
4 "Compliance" based on "empathy" and "trust"
Since "designed compliance" gives officers and employees "satisfaction" and "security", they feel so "comfortable" and so “easy” as to comply with such compliance. These two factors have traditionally been required for "excellent design". In other words, in the undercurrent of the word "design" lies not mechanical but warm-hearted, human-to-human and "heart-to-heart contact" such as "people design things or people design clothes". In the "compliance" of financial institutions, it is a prerequisite that there is a warm human relationship such as "empathy" and "trust" between the top management and the people who work in frontline of the business. Don't forget it.