We are back with another podcast on Adventures in Compliance, where we consider the intersection of Sherlock Holmes and Compliance. Today, I visit The Adventure of the Creeping Man. From this story we take the Holmes utterance to Watson “Come at once if convenient—if inconvenient come all the same”. This informs today’s discussion how Boards of Directors can be more involved in compliance through more effective oversight of risk management.

In this story, a man named Trevor Bennett comes to Holmes with a most unusual problem. He is personal secretary to Professor Presbury’s and is engaged to his only daughter, Edith. Professor Presbury, 61, is engaged to Alice Morphy, a colleague’s daughter. Bennett reports to Holmes that the Professor is receiving strange packages from the Continent; his behavior is even stranger and most significantly, he has been attacked more than once by his faithful wolfhound who is now chained in the barn.

The Professor’s odd behavior occurs at regular intervals and becomes stranger after Bennett’s visit to Baker Street. The Professor is seen bounding along on all fours; Holmes quickly concludes the Professor is taking an animal extract that is causing the bizarre behavior.

When, on a final rampage, the Professor is nearly killed by his formerly faithful dog, Holmes and Watson are able to find the extract, from langurs, that is causing the odd behavior. Although it has apparently given the Professor renewed energy, it has also given him some langurs traits.

Compliance Takeaways

  1. What is the role of a company’s Board in a compliance program?
  2. A Board should not engage in management but should engage in oversight of the Chief Compliance Officer. The Board does this through asking hard questions, particularly around risk assessment, risk identification and risk management.
  3. What are 6 principles for Board oversight of compliance?
  4. Define the Board’s role.

A.Foster a culture of compliance risk management.

B. Incorporate risk management directly into a compliance strategy.

C. Define the company’s appetite for risk around compliance.

D. Execute the compliance risk management process.

E. Benchmark and evaluate the compliance process.

5. CCO reporting to the Audit/Compliance Committee must be structured carefully to promote ethics and compliance. Here are five best practices to help guide the reporting.

a. Quarterly reports.

b. Executive session.

c. Sitting in on other reports.

d. Informal relationship.

e. Annual report to full board.

Join us tomorrow as we mine the story of The Lion’s Mane for its compliance lessons.