Fine-Tuning Compliance and Workforce Oversight in the New Normal

As the remote work environment stretches into the end of the year, questions of proper oversight of employees and workplace practices are becoming more common among both fund and corporate directors. From what the MFDF has heard, fund directors have been actively engaging with their CCOs on this topic. For instance, some CCOs have told their boards that they are scheduling more frequent meetings with trading staff and with IT departments around cyber security. Additionally, CCOs are asking for more documents and reports from vendors that would not normally be provided, and CCOs are initiating more frequent virtual visits with vendors. One advantage of these remote meetings is that more directors are able to attend these virtual meetings compared to the annual onsite visits.  A recent article by Deloitte noted that the COVID-19 pandemic “is not a passing storm, something to be waited out before we return to a familiar business rhythm and routine. Rather, the pandemic is a fundamental challenge to strategic planning and a foundational shift in the way organizations operate.”  The report urged boards to be adaptable and alert in their oversight. While the article’s corporate focus may be too broad for fund boards, boards can apply some strategies to develop sharper sightlines into compliance and ask better questions of management.  Among other things, the Deloitte article asks boards to consider:

  • Do the actions taken by management align with legal, fiscal, operational, technological, and other requirements and, more importantly, the expanded expectations of today’s workforce and other stakeholders?
  • Does the board have the proper information to collect and leverage external perspectives to pressure-test priorities and strategies?
  • What levels of resiliency, and with what measures, can guide investments in workforce management, finance, supply chain, and other areas?
  • Does a plan exist to respond to future disruptions, and is management building the practices and leadership needed to adapt and thrive?