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Founder/CEO Resigns over Compliance Failures

The founder and CEO of a large benefits consulting firm resigned over compliance failures.  In a letter to employees, the new CEO said that the resignation resulted from inadequate internal compliance processes, controls, and actions.  The new CEO also faulted the firm for a “culture and tone” that “have been inappropriate for a highly regulated company.”  He said that the revamped firm “has moved into a new phase of delivering at scale and needing to win the trust of customers, regulators, and other stakeholders.”  The firm also appointed a new Chief Compliance Officer, who previously served as a federal prosecutor, tasked with creating “best-in-class” compliance.

OUR TAKE: Failure to focus on compliance infrastructure can have the same negative consequences for senior executives as product failures, revenue shortfalls, or stock price declines.

 

https://www.zenefits.com/blog/zenefits-names-david-sacks-ceo/

https://www.zenefits.com/blog/ceo-transition/