The possible role of the Chief Ethics and Compliance Officer in Maltese financial Institutions

Abstract

This dissertation attempts to show that the role of the CECO is relevant in the Maltese business community. Ethics and compliance is evolving and the trend is that it will spread worldwide making the role of the Chief Ethics and Compliance Officer (CECO) a necessity. Enron, Worldcom, Parmalat and Tyco are among those companies that shocked the world because of their corporate failures due to new means of creative accounting, unethical behaviour, and corporate scandals. “With each scandal, the general public grew ever more distrustful of, and cynical about, corporation of every stripe.”2 In the United States, the Sarbanes-Oxley Act was enacted; the Federal Sentencing Guidelines for Organisations (FSGO) and Securities and Exchange Commission (SEC) issued guidelines in order to prevent companies from causing another scandal. In America the role of the CECO is widespread and a requirement, whilst in Europe it is being implemented gradually by multinationals and large financial institutions. Malta should be proactive and implement the role of the CECO in order to avoid any unnecessary ethical scandals that can harm our financial sector. In this dissertation, the role of the CECO is discussed and examples of companies who entrusted the ethics and compliance function are reviewed. The possible role of the CECO is analysed with an eye to the Maltese business environment.