Profile: Annette Donselaar, chief compliance officer, AIA Hong Kong
After a career that has so far spanned the military, industry associations, regulators and banks, Annette Donselaar is leading the Australian compliance charge into Asia. Stuart Fagg spoke to the chief compliance officer at American International Assurance in Hong Kong, about the myriad challenges facing compliance professionals
After heading up compliance at National Australia Bank and Westpac, Annette Donselaar joined a growing band of Australian compliance professionals heading overseas last year when she joined American International Assurance in Hong Kong. She now heads a team of 200 compliance staff spread across 14 countries in Asia in arguably one of the most complex and evolving compliance environments in the world.
Describe your role at American International Assurance
I’m vice president and chief compliance officer for AIA. American International Assurance is a wholly owned subsidiary of AIG [American International Group], which is one of the largest financial services providers in the world, operating in 130 countries. AIA is a life insurance entity which operates throughout Asia and has significant brand recognition in a number of countries in the region.
How different are the challenges of managing compliance across a number of countries from the Australian environment?
The differences and the variety of issues are enormous. In Asia, Australia is regarded as a strongly regulated country. Probably the only other country that comes close to it is Singapore, closely followed by Malaysia. For the rest of the countries that I look after, the legislative obligations are emerging and the regulators are still in the process of creating a profile. Another major challenge is the fact that a lot of the transactions are still conducted in cash, which increases the tendency for fraud related issues – far more so than I experienced in Australia.
So what are the current compliance challenges in Asia?
The big thing that’s really impacting Asia at the moment is anti-money laundering (AML). In the last six months we have had anti-money laundering legislation introduced or amended in Indonesia, China, India, Singapore and of course in Australia. Around half the countries that I look after in the last six months have had to do significant work on anti-money laundering processes, procedures and training. Other challenges would include general market conduct issues, corruption, counter-terrorism obligations and effective complaints handling.
Is there a lot of demand for Australian compliance professionals to move into Asia and head up these regional compliance functions?
Yes. I was approached because of my experience in the compliance profession in Australia and I have met several other Australians who are now working across Asia that I used to work with at ASIC [Australian Securities and Investments Commission]. I am also aware of a few people who have moved to Hong Kong in the last 12 months who are working in CCO [chief compliance officer] roles now or in other senior compliance roles in Asia.The Middle East is also an increasingly popular destination. If you look at the Dubai and Qatar monetary authorities for example, there are an number of ex-ASIC people.
What have been the biggest changes in recent years both within the profession and the discipline of compliance?
Perhaps I can answer that by comparing how I see the evolution of compliance in both Australia and Asia. In Australia, compliance started out focusing on translating legal obligations into practical solutions. So compliance professionals typically came from the legal profession. In Asia, we’re focussed on monitoring control effectiveness and as a result a lot of people who work in compliance in Asia come from an audit background. So it’s been really interesting for me having come through the Australian compliance evolution from the legal focus, and moved to Asia where it’s all about control measurement and assessment. But both approaches are part of the same equation. What I see happening is they are both converging to the single point of assessing the risk appetite of an organisation to deal with range of options in addressing compliance risk in an efficient and cost effective way. Asia tends to emphasise process, Australia now looks more at behaviour. An effective compliance framework needs to address both. The biggest challenge in Asia is to broaden the focus without compromising the strengths of the current structure.
How well do you think the business community both in Australia and Asia grasp the potential of compliance to add value to organisations?
The value proposition is difficult as the challenge lies in being able to measure compliance quantitatively. The finance industry is all about numbers, so anything less is a hard sell. However, the true value-add is a mixture of bottom line results and corporate behaviour. I find the latter the most interesting, and tend to spend most of my time looking at the cultural and behavioural aspects of compliance. Anyone can write a checklist or a process, but I like trying to get people engaged, and that requires, I believe, people working with people trying to work out solutions and that’s what challenges me.
Is that more of a challenge in Asia?
It is. Compliance in Asia is generally seen as a function of internal audit – we come in and do some pre-vetting and checking before internal auditors arrive. Now I don’t think that’s unique to my organisation – it seems to be much the way that it’s viewed everywhere in Asia. There’s been a real growth of compliance in Asia but I think it’s more along the lines of realising that in order to remain competitive, you need to understand the environment you’re working in and with the environment becoming more and more regulated, you need to have somebody there to help you understand what that means and be able to put appropriate procedures in place.
What are the other key differences?
Another thing that’s really interesting is that we’re a common law country in Australia, so we think not only in the context of the law but also equity. We think about fairness and what is just. With a lot of the countries I deal with the notion of equity is foreign – it doesn’t exist. This poses a real challenge when you are trying to discuss the moral consequences of a decision and not just a strict legal view.
What do you see as the key future trends in compliance?
Asia at the moment is an exciting place for a compliance professional because it is maturing from a control monitoring approach into a framework looking at the delivery of business options. So that’s exciting. In Australia, I think the focus of compliance should be more in setting the agenda of our obligations and working a lot more with business and government – being at the table influencing and guiding reform and change. Compliance has always been in the best position to drive change due to its unique position within a company, but we have a tendency to react rather than set the agenda. To me, this should be the next step in the evolution of the profession which in turn will further enhance the value proposition of compliance.
Annette Donselaar is vice president and chief compliance officer at AIA. She is based in Hong Kong
News