SEC staff morale low, atmosphere marked by distrust: study

July 19, 2013 Leave a comment

SEC staff morale low, atmosphere marked by distrust: study

Thu, Jul 18 2013

By Sarah N. Lynch

(Reuters) – The Securities and Exchange Commission is not the best place to work among federal agencies in Washington, according to a new study by a government watchdog. The SEC’s organizational structure “has not been conducive to motivating and encouraging a high level of performance,” concluded the Government Accountability Office in a report released on Thursday. “Many staff indicated that morale is low and a significant percentage characterize the atmosphere of the agency as one of distrust,” the GAO said.The GAO’s report was required by the 2010 Dodd-Frank Wall Street reform law, whose three-year anniversary is this month.

The study was mandated following several high-profile lapses at the SEC during the financial crisis, including its failure to detect Bernard Madoff’s massive Ponzi scheme.

An Office of Personnel Management survey of federal employees ranked the SEC 19th of 22 similarly sized agencies based on employee satisfaction.

The GAO laid out several areas in need of improvement, including workforce planning, performance management, communication and personnel management assessment.

While the SEC has taken some steps in most of these areas to improve, the GAO urged the agency to do more.

Some of the findings in the GAO’s report are consistent with complaints often lodged by the SEC’s Chapter of National Treasury Employees Union.

In addition, the GAO’s survey found that many employees still view the culture at the SEC as “siloed” – where one division does not talk to the other.

This was highlighted several years ago by the Madoff and Allen Stanford Ponzi scandals, where examiners and enforcement lawyers failed to properly communicate and may have missed opportunities to detect the schemes.

The GAO said the SEC is actively working to create a comprehensive workforce plan and is trying to close skill gaps to hire people with more financial industry expertise.

Still, the GAO said, the SEC lacks a transparent process for leadership succession and many interviewed did not see “much incentive” to be promoted into management positions.

In a letter responding to the GAO study, SEC Chair Mary Jo White said she recognizes there is still “work to do in these areas” and that she is “committed to ensuring that process continues.”

The SEC agreed with the report’s recommendations, she said. She added that the SEC is taking steps toward addressing workforce competency gaps and improving intra-agency communication.

She also said the SEC has successfully implemented pay-for-performance for non-bargaining unit employees, and is still in the process of assessing the impact of the new system.

An SEC spokeswoman declined to make any additional comment.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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