Home » Compliance Blog » Uncategorized » Founder/CEO Resigns over Compliance Failures

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.