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Agenda, a Financial Times Service: "Will Trump Reduce the Risk Management Drag?"

01/19/2017 News Release Image

Agenda, a Financial Times Service: "Will Trump Reduce the Risk Management Drag?"

. . . John Alan James, chairman emeritus of the Center for Global Governance, Reporting and Regulation at Pace University, believes the final legislation will ultimately be shaped by compromises that White House and congressional leaders hammer out.

“One can expect a major change in both attitudes and regulatory requirements for boards, executives and their oversight groups,” he writes in an e-mail. “One main goal would be the reduction in the amount of administrative staff and executive and board time(s) now required with current rules.”

A former management consultant with McKinsey and his own Belgian-based firm, James predicts that regulators will take a more lenient approach when examining board members who’ve been accused of violating risk management and compliance procedures. Currently, he writes, regulators consider such persons more or less guilty until proven innocent. Some regulators, he warns, even demand to interview all directors individually, especially non-executive directors.

Therefore, he expects directors in the U.S. will need to follow best practices for both setting risk policy and overseeing its implementation, just as boards governed by the European Union must. But under a Trump administration, James writes, compliance is likely to drift to a more principles-based, rather than the current rules-based, model.

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