Citibank 2014 Annual Report Download - page 89

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The elements supporting these three pillars are discussed in greater
detail below.
Citi’s Compliance Function
Compliance aims to execute Citi’s compliance risk appetite framework-
and thus eliminate, minimize, or manage compliance risk-through Citi’s
compliance program. To achieve this mission, the Compliance function
seeks to:
•฀ Understand the regulatory environment, requirements and
expectations to which Citi’s activities are subject. Compliance
coordinates with Legal and other independent control functions,
as appropriate, to identify, communicate and document key
regulatory requirements.
•฀ Assess the compliance risks of business activities and the state of
mitigating controls, including the risks and controls in legal entities
in which activity is conducted. To facilitate the identification and
assessment of compliance risk, Compliance works with the businesses and
other independent control functions to review significant compliance and
regulatory issues and the results of testing, monitoring, and internal and
external exams and audits.
•฀ In conjunction with Citi’s Board of Directors and senior
management, define Citi’s appetite for prudent compliance and
regulatory risk consistent with its culture for compliance, control and
responsible finance. As noted above, Citi has developed a compliance
risk appetite framework designed to eliminate, minimize or mitigate
compliance risk.
•฀ Develop controls and execute programs reasonably designed to limit
conduct to that consistent with Citi’s compliance and regulatory risk
appetite and promptly detect and mitigate behavior that violates those
limits. Compliance has business-specific compliance functions (e.g.,
Global Consumer Banking and Institutional Clients Group), regional
programs, and thematic groups and programs (e.g., the AML Program
and the Conduct, Governance, and Emerging Risk Management group)
that aim to mitigate Citi’s exposure to conduct that is inconsistent with its
compliance risk appetite.
•฀ Detect, report on, escalate and remediate key compliance and
franchise risks and control issues; test controls for design and
operating effectiveness, promptly address issues, and track
remediation efforts. Compliance designs and implements policies,
standards, procedures, guidelines, surveillance reports and other solutions
for use by the business and compliance to promptly detect, address and
remediate issues, test controls for design and operating effectiveness, and
track remediation efforts.
•฀ Engage with the Board, business management, operating committees
and Citi’s regulators to foster effective global governance. Compliance
provides regular reports on emerging risks and other issues and their
implications for Citi, as well as compliance program performance, to the
Citigroup and Citibank, N.A. Boards of Directors, including the Audit and
Ethics and Culture Committees, as well as other committees of the Boards.
Compliance also engages with business management on an ongoing
basis through various mechanisms, including governance committees,
and it supports and advises the businesses and other global functions in
managing regulatory relationships.
•฀ Advise and train Citi personnel across businesses, functions,
regions and legal entities in how to comply with laws, regulations
and other standards of conduct. Compliance helps promote a
strong culture of compliance and control by increasing awareness and
capability across Citi on key compliance issues through training and
communication programs. A fundamental element of Citi’s culture is
the requirement that Citi conducts itself in accordance with the highest
standards of ethical behavior. Compliance plays a key role in developing
company-wide initiatives designed to further embed ethics in Citi’s
culture. These initiatives include training for more than 40,000 senior
employees that fosters ethical decision-making and underscores the
importance of escalating issues. The initiatives also include a video series
featuring senior leaders discussing difficult ethical decisions, regular
communications on ethics and culture, and the development of enhanced
tools to support ethical decision-making. Compliance partners with the
businesses and other functions to develop and implement these and other
ethics and culture initiatives.
•฀ Enhance the Compliance Program. Compliance fulfills its obligation
to enhance the compliance program in part by using its annual
compliance risk assessment results to shape annual and multi-year
program enhancements.
Organization Structure and Staff Independence
Citi’s Chief Compliance Officer manages the Compliance function. The Chief
Compliance Officer or a designee is responsible for reporting significant
compliance matters to Citi’s senior management, the Boards of Directors,
their designated committees, and other relevant forums.
Citi’s Chief Compliance Officer reports to the Head of Franchise Risk and
Strategy, who reports directly to Citi’s Chief Executive Officer. All compliance
officers report directly to Citi’s Chief Compliance Officer through one of
the above mentioned direct reports. This structure provides the required
independence of Compliance from the revenue-producing lines of business.