Issue 5: You Don't Know What an Audit is, Bucko!

April 14 2023

Two truths: Don’t start a land war in Asia, and don’t underestimate Jon Stewart.

The former Daily Show host and advocate for veterans had a robust and honest conversation about military spending with US Deputy Defense security Kathleen Hicks.

Things got a little prickly when Stewart pressed Hicks about the Pentagon failing to earn a “clean” report in its annual financial audit .

"I might not understand the ins and outs and the incredible magic of an audit, but I am a human being who lives on Earth and can’t figure out how $850b to a department means that the rank and file still have to be on food stamps. To me, that is f***** corruption," said Stewart.

The conversation was the keynote event of a symposium co-hosted by the University of Chicago’s Harris School of Public Policy.

The full chat is available on C-Span , but the essential 6 minutes can be watched below:

And if that wasn't testy enough for you, wait until you hear about what went down in the world of GRC this week.

1: EY’s Everest a Peak Too Far

About 800 people attempt to scale Mt Everest every yea r. EY didn’t even get to base camp, after this week dropping plans to break up its audit and consulting businesses.

The FT reported that the decision to spike the plan – modestly called “Project Everest” – came after “months of internal disagreement and opposition from [EY] executives in the US”.

Under the break-up plan, consultants at the ‘Big Four’ firm would’ve pocketed shares in the new business worth up to nine times their annual pay. Audit partners would’ve cashed in windfalls up to four times their annual earnings.

But this didn't wash with the company's US business, who doubted how prudent splitting the business in two would be.

The temptation to split was, maybe, understandable. And with all things GRC, this won't be the last we hear of it.

2: JP Morgan Killed the WFH Song

From the file cabinet labelled “Well, Obviously” comes this little memo.

JPMorgan told its employees Wednesday that?its managing directors are required in the office five days a week ,?

And you can bet your bottom dollar that other banks will follow suit.

JPMorgan CEO Jamie Dimon has worn his distaste for remote work on his sleeve, while Goldman Sachs’ David Solomon has similarly touted how important office work is.

But if you think you’ve heard this one before, you have:

And let's not forget the elephant in the room wearing a t-shirt that says "Big Property Guy".

Same as it ever was. Same as it ever was.

3: Is it Time for a Global GRC Code of Conduct?

An intriguing idea from Chief Compliance Officer at FUJIFILM Holdings America Corporation Holdings Patrícia Colombo:

4: Do Five Whys Work For Compliance?

An interesting idea put forward by Richard L Cassin at FCPA Blog – taking Toyota’s infamous “Five Whys” and applying it to the compliance model.

The Five Whys peers back the symptoms and gets to the root of the problem. For compliance teams, Cassin says companies can define a problem and then ask “why” multiple times to uncover its root cause.

It’s a worthwhile exercise, but still susceptible to lack of expertise among investigators, bad assumptions, and multifaceted problems.

But as The Backstreet Boys might argue, there’s merit in asking “Tell Me Why”?

5: Why Businesses Leaders Must Resist The Anti-ESG Movement

ESG – three little letters that have (seemingly) lit a bonfire of culture war rhetoric. And why the EU is doubling down on its commitments, the same can’t be said for the other side of the Atlantic.

But as this piece from the Harvard Business Review argues, American execs need not fear the ESG reaper.

“Even as critics of ESG investing get louder, some investors in conservative regions are pushing back. Pension fund executives in Kentucky and North Dakota say?they won’t pull money ?from ESG-friendly financial services firms. And in Indiana and Nebraska,?banking associations are lobbying against GOP-written legislation ?that would force them to pull money from any financial institutions using ESG criteria.”

And as the article puts it thus: "You may hate to wade into policy issues, but you can’t avoid it."

Just don't fall into the greenwashing trap:

6: Time to Retire the Risk Management Profession?

This should get tongues wagging.

Navy veteran and current director of risk at?Burberry , Stefan Gershater ,?talks about the flaws in the risk management profession and how he thinks the profession can be better. We love this quote in particular:

“I’ve spent my risk career trying to disassociate the word risk from the word threat.”

7: Breaking Up is Hard to Do

The FT explains what went down at EY this week.

8: Why Top CSOs are Heading to Blackstone

While not strictly speaking about GRC, this conversation with Tom Callard, who recently joined Blackstone as its new Brand Transformation Lead, is as fascinating insight into how finance firms are starting to double-down on brand.

And to see the full range of jobs we are recruiting for, visit our jobs page here on LinkedIn.