The Importance of the Duties of the Director of Compliance

Oct 13, 2025 by talynt.org 51 views

Analysis of the Duties of Compliance Director (Compliance of Director) in Bank Management

The Crucial Role of Compliance Director in Bank Management

The Compliance Director has a very crucial role in bank management, as its strategic task can prevent losses for the company. Monitoring carried out by the Compliance Director includes identification, assessment, granting of advice, and monitoring and reporting of compliance risks faced by the bank. These risks include legal sanctions, financial losses, or loss of reputation that may be experienced by banks due to failure in complying with law, code of ethics, and banking practice standards. The Compliance Director's role is to ensure that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

The Importance of the Duties of the Director of Compliance

The method used in this analysis is normative juridical research, where the authors conduct an assessment of library materials and secondary data. This process involves reading, interpretation, and translation from various sources relating to the responsibilities of the Compliance Director. The task of the Compliance Director in accordance with Bank Indonesia Regulation (PBI) Number 13/2/PBI/2011 includes formulating strategies to encourage the creation of compliance culture within the bank, propose compliance policies to be approved by the Board of Directors, and establish the system and procedures of compliance that must be followed. The Compliance Director's duties are critical in ensuring that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

In addition, the Compliance Director is responsible for ensuring that all policies, provisions, systems, and procedures are carried out by the Bank in line with the provisions of Bank Indonesia and applicable laws and regulations. This includes the application of sharia principles for commercial banks and sharia business units. The Compliance Director's role is to ensure that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

The Role of Bank Indonesia and the Health System of the Banking System

The role of Bank Indonesia related to the task of the Director of Compliance is to issue regulations that aim to achieve a healthy, strong and efficient banking system. With this regulation, Bank Indonesia is trying to create financial system stability, which in turn will protect the interests of depositors, creditors, and all stakeholders. In this context, the Compliance Director has the responsibility to ensure that policies and practices in the field are in accordance with existing regulations. The Compliance Director's role is to ensure that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

Based on Article 97 paragraph (2) of Law Number 40 of 2007 concerning Limited Liability Companies, the Board of Directors has a large position and power in company affairs. This is an important reason for regulating the directors' behavior so as not to abuse his power. One of the important elements in this arrangement is the establishment of a standard of behavior (standards of conduct) that can protect parties who have the potential to be disadvantaged due to dishonest behavior or abuse of authority by the Board of Directors. The Compliance Director's role is to ensure that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

Directors can only be held accountable if they have carried out management that is considered wrong. Therefore, it is important for each member of the Board of Directors to comply with the principles of Good Corporate Governance in carrying out their duties and authority. This includes transparency, accountability, and responsibility in decision making that affect the company. The Compliance Director's role is to ensure that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

The Impact of Compliance Director's Duties on Bank Management

The task of the Compliance Director in bank management is very vital, given its impact on the company's health and the overall financial system. Through the application of appropriate policies and strict supervision, the Director of Compliance acts as the first defense line in preventing violations that can harm the bank. Thus, banking institutions can operate more efficiently and reliable, while maintaining public confidence and stakeholders. The Compliance Director's role is to ensure that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

Conclusion

In conclusion, the task of the Compliance Director in bank management is very vital, given its impact on the company's health and the overall financial system. Through the application of appropriate policies and strict supervision, the Director of Compliance acts as the first defense line in preventing violations that can harm the bank. Thus, banking institutions can operate more efficiently and reliable, while maintaining public confidence and stakeholders. The Compliance Director's role is to ensure that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

Recommendations

Based on the analysis, the following recommendations are made:

The Compliance Director should be given more authority and autonomy to ensure that the bank operates in a compliant manner.
The Compliance Director should be responsible for ensuring that all policies, provisions, systems, and procedures are carried out by the Bank in line with the provisions of Bank Indonesia and applicable laws and regulations.
The Compliance Director should be responsible for establishing the system and procedures of compliance that must be followed.
The Compliance Director should be responsible for ensuring that the bank operates in a compliant manner, which is essential for maintaining public trust and confidence in the banking system.

Limitations of the Study

This study has several limitations, including:

The study only focuses on the role of the Compliance Director in bank management.
The study does not consider the impact of other factors, such as the economy and politics, on the role of the Compliance Director.
The study only uses secondary data, which may not be comprehensive or up-to-date.

Future Research Directions

Future research should focus on the following areas:

The impact of the Compliance Director's duties on the bank's financial performance.
The relationship between the Compliance Director's duties and the bank's risk management.
The impact of the Compliance Director's duties on the bank's reputation and public trust.

Conclusion

Q: What is the role of the Compliance Director in bank management?

A: The Compliance Director has a crucial role in bank management, as its strategic task can prevent losses for the company. Monitoring carried out by the Compliance Director includes identification, assessment, granting of advice, and monitoring and reporting of compliance risks faced by the bank.

Q: What are the key responsibilities of the Compliance Director?

A: The key responsibilities of the Compliance Director include formulating strategies to encourage the creation of compliance culture within the bank, proposing compliance policies to be approved by the Board of Directors, and establishing the system and procedures of compliance that must be followed.

Q: What is the importance of compliance in bank management?

A: Compliance is essential for maintaining public trust and confidence in the banking system. It helps to prevent violations that can harm the bank and ensures that the bank operates in a compliant manner.

Q: What is the role of Bank Indonesia in relation to the Compliance Director?

A: Bank Indonesia issues regulations that aim to achieve a healthy, strong and efficient banking system. The Compliance Director has the responsibility to ensure that policies and practices in the field are in accordance with existing regulations.

Q: What are the principles of Good Corporate Governance that the Compliance Director should follow?

A: The Compliance Director should follow the principles of Good Corporate Governance, which include transparency, accountability, and responsibility in decision making that affect the company.

Q: What are the consequences of non-compliance in bank management?

A: Non-compliance can result in legal sanctions, financial losses, or loss of reputation that may be experienced by banks due to failure in complying with law, code of ethics, and banking practice standards.

Q: How can the Compliance Director ensure that the bank operates in a compliant manner?

A: The Compliance Director can ensure that the bank operates in a compliant manner by applying appropriate policies and strict supervision, and by establishing the system and procedures of compliance that must be followed.

Q: What are the benefits of having a Compliance Director in bank management?

A: The benefits of having a Compliance Director in bank management include preventing violations that can harm the bank, ensuring that the bank operates in a compliant manner, and maintaining public confidence and stakeholders.

Q: How can the Compliance Director measure the effectiveness of compliance in bank management?

A: The Compliance Director can measure the effectiveness of compliance in bank management by monitoring and reporting compliance risks, and by evaluating the impact of compliance on the bank's financial performance.

Q: What are the challenges faced by the Compliance Director in bank management?

A: The challenges faced by the Compliance Director in bank management include ensuring that the bank operates in a compliant manner, managing compliance risks, and maintaining public confidence and stakeholders.

Q: How can the Compliance Director stay up-to-date with changing regulations and laws?

A: The Compliance Director can stay up-to-date with changing regulations and laws by attending training and development programs, reading industry publications, and networking with other compliance professionals.

Q: What are the key skills and qualities required for a Compliance Director?

A: The key skills and qualities required for a Compliance Director include strong analytical and problem-solving skills, excellent communication and interpersonal skills, and the ability to work independently and as part of a team.

Q: How can the Compliance Director ensure that the bank's compliance program is effective?

A: The Compliance Director can ensure that the bank's compliance program is effective by establishing a clear compliance policy, training employees on compliance, and monitoring and reporting compliance risks.

Q: What are the consequences of non-compliance for the Compliance Director?

A: The consequences of non-compliance for the Compliance Director can include disciplinary action, loss of job, and damage to reputation.

Q: How can the Compliance Director demonstrate the value of compliance in bank management?

A: The Compliance Director can demonstrate the value of compliance in bank management by measuring the impact of compliance on the bank's financial performance, and by communicating the benefits of compliance to stakeholders.

Q: What are the key performance indicators (KPIs) for the Compliance Director?

A: The key performance indicators (KPIs) for the Compliance Director include compliance risk management, compliance policy development, and employee training and awareness.

Q: How can the Compliance Director ensure that the bank's compliance program is aligned with the bank's overall strategy?

A: The Compliance Director can ensure that the bank's compliance program is aligned with the bank's overall strategy by working closely with the bank's senior management and board of directors, and by ensuring that the compliance program is integrated into the bank's overall risk management framework.