The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are taking their courtship public.

The regulatory agencies will hold joint meetings to seek input from the public on “harmonization of market regulation.”

The first meeting, slated for Sept. 2, will be hosted by the CFTC. The second meeting, Sept. 3, will move to the SEC’s house. Here is the invitation. more

Ever since Uncle Sam pumped billions into Citigroup, Bank of America, and other banking behemoths in order to keep them alive, the question has come up: Just how big is too big, when it comes to banks?

The answer isn’t as straightforward as it might seem. Intuitively, it would seem that if a bank is too big to fail, and thus warrants the use of taxpayer money to keep it from death’s door – then, it’s simply too big. And, highly concentrated banking systems would seem more volatile than banking markets that boast more disbursed competition. more

On a recent webcast, I was asked: “If we move to rolling forecast and eliminate annual budgets, how can we provide incentive compensation? Are there approaches for building incentives off of a rolling forecast?” I will answer that question in my next two blogs.

Most organizations base incentive compensation on reaching fixed budget targets. The standard reason for this is that they want to “pay for performance.” In reality, nothing could be further from the truth. This is one of the worst practices in management because what really happens is that the organization “pays for negotiated results.” Instead of rewarding the best performers/achievers, you reward the managers who successfully negotiate the lowest levels of performance and execution. As a result, your management process drives subpar performance. Forget about “being the best you can be” or striving for the maximum performance you can achieve. more

The term “governance risk management and compliance (GRC)” entered the business vernacular as a result of a specific need in the wake of the “most sweeping U.S. regulatory reform since the formation of the Securities and Exchange Commission.”

The post-Sarbanes need was for a more disciplined, efficient, effective, and, in most cases, centralized approach to managing these corporate functions.

The need still exists today: 73 percent of respondents to an Ernst & Young risk survey indicate that their enterprises maintain seven or more risk functions. Sixty-seven percent of these respondents report that they have overlapping coverage among two or more risk functions; additionally, half of the respondents acknowledge that there are gaps in their organization’s risk coverage.

That doesn’t sound terribly effective or efficient. more

Recently I have had opportunities to visit with various organizations and speak with controllers, auditors, and fraud examiners about some of the challenges they see in the area of assuring compliance with prescribed business processes. With many organizations facing reduced resources assigned to “maintaining control” the case is strong for finding ways to use technology to be on guard 24/7 in order to keep a “watchful eye.” more