Legal

Privacy

The reputational damage linked to a series of high-profile data breaches, combined with strict data privacy rules introduced by GDPR and the CCPA, have ensured the protection of sensitive consumer data remains in the spotlight. As such, more organisations have appointed and/or elevated the Chief Privacy Officer role.

  • Facebook appointed Michel Protti as the organisation’s first Chief Privacy Officer, Product. He was previously VP, Partnerships Product Marketing.
  • Renard Francois joined JP Morgan Chase as Global Chief Privacy Officer from GE where he was Global Chief Privacy Officer.
  • Felipe Paez joined EY as Global Privacy Officer from GE where he was Chief Counsel, Information Security and Cyber.

Move to Fintech’s

An increasing number of senior legal leaders are moving from international blue-chip institutions into rapidly growing start-up or fintech environments. Veteran legal counsels are able to help these organisations navigate the regulatory environment as it continues to evolve. This has also been reflected in senior compliance moves.

  • Noah Perlman joined Gemini, the digital currency exchange, as Chief Compliance Officer from Morgan Stanley where he was Global Head of Financial Crime.
  • Derek Gobel joined bitcoin trading platform BitMEX as Global General Counsel from BNP Paribas where he was Chief Compliance Officer, APAC.
  • Edgar Cale joined biotech start-up Passage Bio as General Counsel from GlaxoSmithKline where he was SVP, Legal Corporate Projects.

GC’s being elevated

2019 saw a high number of general counsels being elevated, to CLO roles with broader mandates, or in some cases to CEO roles.

  • Accenture appointed Julie Sweet as Chief Executive Officer. She was previously General Counsel, Chief Compliance Officer and Corporate Secretary before becoming Chief Executive Officer, North America.
  • Chris Wiedeman, GC of Litigation & Regulation at Apollo (and former Treasury Department Deputy GC and Chief of Staff), was appointed General Counsel. Meanwhile John Suydam moved into a CLO role.
  • Nasdaq, announced Edward Knight, the GC, will assume the role of Vice Chairman. Knight will continue to manage global government relations and will serve as a senior advisor on public policy and litigation. John Zecca, Chief Regulatory Officer & GC for North America was elevated to GC.

Risk

Profile of the CRO

The experience sought in Chief Risk Officer appointments continues to evolve. Post crisis there was a trend of risk divisions looking to business units to strengthen their leadership ranks, but with boards and regulators continuing to demand CRO’s focus of non-financial risks, we’ve seen consolidation of these responsibilities under the CRO, and in some cases individuals with non-financial risk backgrounds assume the CRO role itself.

  • HSBC appointed Pam Kaur as Group Chief Risk Officer, replacing Marc Moses who has retired. While she was previously Head of Wholesale Market and Credit Risk, she spent most of her prior career in compliance and audit leadership roles.
  • Deborah Hrvatin joined CLS, the market infrastructure firm as Chief Risk Officer from Citi, where she was Global Head of Operational Risk Management of the Institutional Client Group.
  • Jan-Hendrik Erasmus joined Aviva as Chief Risk Officer from NN Group where held the same role. He was previously a Partner with Oliver Wyman with both extensive regulatory and technical experience.

Non-Financial Risk 

The growth of non-financial risk functions within financial institutions continued throughout 2019. With many of the largest risk events in recent years stemming from non-financial risks, principally regulatory, conduct and cyber, there has been growing recognition of the need to enhance the management of these risks. Roles such as the Head of IT Risk & Resilience Risk have been created and technology professionals are increasingly being sought after to move into “second line” risk leadership roles.

  • Stuart Lewis, Group CRO at Deutsche Bank, assumes responsibility for compliance and financial crime, which follows similar organisational moves by Barclays, Wells Fargo, Bank of America and JPMorgan.
  • Jim Barkley, Global Head of Core Compliance Services at Credit Suisse, takes on an expanded role with responsibility for all Non-Financial Risks under the Group CRO.
  • Cameron ‘Buck’ Rogers joined HSBC as the bank’s first Head of Resilience Risk from the Bank of England, where he was Chief Information Security Officer.

Organisational Realignment and Expense Management

Several global banks and asset managers have formally integrated operational and compliance risk management, others are at least collaborating to ensure more synchronised support is provided to business units which also allows headcount to be managed down.
Also, now that most banks have adjusted to the new “post-crisis BAU”, second line functions have been passing more responsibilities to business units and/or more aggressively pursuing near-shore location strategies to help manage costs.

Compliance

Financial Crime

The Joint National Money Laundering Intelligence Task Force (JLMIT) in the UK, is generally viewed to have been hugely successful in terms of fostering better working relationships between the banks and law enforcement.
It is hoped this will provide a template for similar forums to be established in the US, and around the world. At the same time banks and several asset managers have been leveraging new technologies and analytics to develop more sophisticated surveillance systems, the objective being to ultimately generate higher quality alerts with less resources.

Accountability

The UK regulator was responsible for developing a new approach to individual accountability through SMCR within the financial services sector, and this was extended to asset managers and investment advisors in 2019. SMCR has now started to be used as a blueprint around the world, which has no doubt helped facilitate more engagement on effective compliance and conduct risk management, which in turn has helped elevate the function and stimulate demand for leadership talent. Interestingly, BlackRock, PIMCO, Fidelity, Charles Schwab, Vanguard, SSGA, PGIM, Invesco, Schroders and T Rowe Price have all made Global CCO appointments over the last 2 years.

  • John Oliva was elevated to Chief Compliance Officer for JPMorgan Asset Management, replacing Elaine Fielding who left the bank.
  • Camille Blackburn joined LGIM as Chief Compliance Officer from Aviva Investors where she held the same role.
  • Adrian Ratcliffe joined CQS as Global Chief Compliance Officer. He was previously with Credit Suisse as UK General Counsel, and Reputation Risk Approver.

Sustainability

Responsible investing and the rise of sustainability is starting to feed into prudential regulation, because climate change can increase the risks of insolvency among individual banks and insurers and contribute to wider systemic instability. The Task Force on Climate-Related Financial Disclosures established under the G-20 published guidelines for how financial institutions and corporations should assess and disclose climate risks, and signatories to the United Nations Principles for Responsible Investment which number 2,500 asset owners and investment managers, will comply with the recommendations this year. As a result, 2019 saw several firms create or elevate the “Head of Sustainability” role.

  • Jennifer Wu joined JP Morgan Asset Management as Head of Sustainable Investing from BlackRock where she was a member of the sustainable investing team.
  • Citi appointed Valerie Smith as Chief Sustainability Officer. She was previously Global Head, Corporate Sustainability.
  • Carlo Funk joined State Street Global Advisors as Head of ESG Investment Strategy, EMEA from BlackRock where he was a member of the specialist sales and product development team.

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