Founder/CEO Resigns over Compliance Failures
The founder and CEO of a large benefits consulting firm resigned over compliance failures. In a letter to employees, the new CEO said that the resignation resulted from inadequate internal compliance processes, controls, and actions. The new CEO also faulted the firm for a “culture and tone” that “have been inappropriate for a highly regulated company.” He said that the revamped firm “has moved into a new phase of delivering at scale and needing to win the trust of customers, regulators, and other stakeholders.” The firm also appointed a new Chief Compliance Officer, who previously served as a federal prosecutor, tasked with creating “best-in-class” compliance.
OUR TAKE: Failure to focus on compliance infrastructure can have the same negative consequences for senior executives as product failures, revenue shortfalls, or stock price declines.