Podcast S5E9 | How Children Have Made Me A Better Compliance Leader: Lauren Munfa

Podcast S5E9 | How Children Have Made Me A Better Compliance Leader: Lauren Munfa

Podcast S5E9 | How Children Have Made Me A Better Compliance Leader: Lauren Munfa 1920 1080 Risky Women
Denis Camilo, Risk and Compliance Director at Protiviti, talks with Lauren Munfa, Head of Americas Investment Bank C&ORC at UBS, about how much her parent management training translated to running a large compliance program.

Lauren Munfa is the Americas Head of Compliance & Operational Risk Control (C&ORC) for the Investment Bank Division of UBS, as well as the Chief Compliance Officer for UBS Securities LLC.  Lauren was also the Global Business Team Lead for Control Room, Global Banking and Research & Evidence Lab C&ORC.  Lauren joined UBS in 2016 as the Americas Head of Control Room, Global Banking, Research C&ORC, from Goldman Sachs where she was employed for fifteen years in various roles, including within the Legal and Compliance Departments specifically covering Banking, Capital Markets, Sales and Trading and Research.  At Goldman Sachs, Lauren also served as Chief of Staff for the Global Co-Heads of the Investment Management Division.  Afterwards, Lauren took on a Product Strategy role for Goldman Sachs Asset Management, where she helped lead the development of the group’s stable value strategy.

Show Notes

00:51 Career Journey
03:58 Top Skills for Risk Management
08:05 The Importance of Immediate and Consistent Rewards
15:49 How to Give an Effective Command
21:26 How Root Cause Analysis Applies at Home and in the Office

When you’re a mom, every minute at the office is time away from your children, and you can’t settle for a job that is good enough, it has to be great.

An effective incentive structure needs to have three things: it needs to be rewarding, immediate, and consistent

Protiviti is a global consulting firm that uses technology, innovation, data and analytics to create unique solutions that transform the field of risk management and solve industry wide problems.


Kimberley Cole 0:01
This is Risky Women Radio, a show that connects, celebrates and champions women in risk regulation and compliance. We’re here to share the insights on the biggest issues in our industry and hear inspiring journeys from our global members. Sign up to our newsletter at riskywomen.org. I’m Kimberley Cole, your Chief Risky Woman.

Denis Camilo 0:23
Welcome to our podcast series on Risky Woman Radio. My name is Denis Camilo and I am a Risk and Compliance Director at Protiviti. In this episode, I’m thrilled to introduce Lauren Munfa, who is the Head of Americas Investment Bank and Compliance and Operational Risk C&ORC at UBS. Welcome, Lauren.

Lauren Munfa 0:40
Hi, Denis, thank you very much for having me. Really excited to be here today.

Denis Camilo 0:46
Now, Lauren, we know you had a long and successful career in compliance. How did you land in compliance?

Lauren Munfa 0:51
I landed in compliance really by luck. I was a history major at Yale University. I had spent the summer before my senior year working for a prisoner rights group in Washington, DC. It was a deeply emotional experience where I had the opportunity to visit federal prisons and tour facilities interview inmates and see firsthand the injustices in the system. And my plan after graduation was to spend the year as a paralegal, apply to law schools and then be a public defender. I happened to have a good friend who went to Yale in the Goldman Sachs legal department. She’s one of the smartest people I know. And I had reached out to her for advice on my resume, I thought I would get some feedback on my resume format. And instead, I got a call for an interview. About 15 interviews for an analyst position at Goldman Sachs. Later I was invested, committed and completely exhausted. So I accepted that role. And I had found that working in legal was an incredible first job out of college, I was working directly with law firm partners as their client. And I remember being amazed that when I had comments on an underwriting document, I could just pick up the phone and call a senior associate at a law firm, and share my thoughts. I also was working with an incredible team of in house lawyers, many are industry leaders and in compliance and legal departments at other financial institutions today. But after two years in that role in the legal department, I moved into compliance, there was no upward path in legal without a law degree. And I was very lucky, I was working closely with a lawyer who moved into sales and trading compliance, who knew my strengths and my ambition. And he was someone I trusted and said, you know, come over and work for me. There were clearly benefits at the time, namely, not having to spend hundreds and 1000s of dollars to go to law school. I still work with a lot of lawyers, and most people just assume that I am one. When I landed in compliance, I knew it was the right place for me. It wasn’t criminal law, which was my original intent, but I felt that I had an important role to play in creating a fairer market and protecting individuals from harm.

Denis Camilo 3:05
What did you like about compliance?

Lauren Munfa 3:06
I think here, Denis, the question should be what’s not to like about compliance. Early in my career, I was looking for a role where I would analyze and problem solve, influence and constantly learn, and that’s what you do in compliance. No day is the same. There’s always something new to keep you on your toes despite your best effort to think around corners and anticipate risk. I also knew I was good at asking questions. My third grade teacher had given me the nickname worrywart, which in hindsight is awful. If that happened to my children, I’d be up at their school in a flash, but I’m fairly certain the teacher called me worrywart, because I was constantly questioning even at age nine. And I think that curiosity is a big driver of why compliance and risk has worked out so well for me.

Denis Camilo 3:58
Curiosity is so important to our risk roles. Where do you rank it in your list of top skills when you hire?

Lauren Munfa 4:05
I put curiosity at the top of the list. I get this question a lot from new joiners and candidates on my team. They’ll ask what skills do you think it takes to be successful and risk management and I always start with intellectual curiosity. A few years ago, I launched a campaign on my team around redefining advisory and shifting the balance from answering questions to asking them. When I joined compliance in 2003, the function was a source of advice for the business, bankers, sales traders would call compliance with questions and compliance would answer them in line with our policies and procedures. But it’s evolved quite a bit over the years, and the model has shifted from legal and closer to risk. And when it did, the advisory piece was de emphasized. At one point, I think advisory was a bad word and compliance was all about, you know, reviewing and challenging. But what I’ve seen is that a commercially thoughtful, trusted advisor doesn’t just answer questions, they help management thinks strategically to safeguard the firm by asking the right questions, gathering information, providing independent and proactive insights on the risks and the front to back control environment.

Denis Camilo 5:22
How has your view of what you want from your career changed as a mom?

Lauren Munfa 5:28
Yeah, so look, many things are the same, but the stakes are much higher. When you’re a mom, every minute at the office is time away from your children, and you can’t settle for a job that is good enough, it has to be great. For me COVID accelerated this realization, I think it also drove a lot of people to reassess what’s important and how they spend their time. At my firm, we talk a lot about purpose and our North Star. And for me, being in a purpose driven organization, where my role is about protecting investors and market integrity, that’s important. Also, being a mom to two very different children, I appreciate more than ever that you are who you are. I am who I am too, I welcome feedback, I want to be better. But I also want to be in a role where I’m comfortable being me. You know, we talk about this a lot with Generation Z. So maybe it’s more of a product of the new normal than it is about me being a mom. But certainly, my views have changed more recently.

Denis Camilo 6:29
And I agree being a parent isn’t easy. Has it made you better at compliance?

Lauren Munfa 6:36
So I always say, parenting is the toughest job you will love to do. I also joke about the curse of being a Chief Compliance Officer because at times, I’m more successful getting 1000s of people to comply at the office than my own two children. When my son was born, I thought work had prepared me for parenthood, I was mentally tough. I had built a tolerance for exhaustion. I was good at problem solving. I faced setbacks and challenges at work. But I quickly realized these things helped. But unlike at the office, there was no mandatory training, no employee handbook, and to a risk professional, that is super scary. So I responded in the way I was trained through work, I sought help. I turned to some terrific experts. I was fortunate that I found excellent organizations, the Yale Children’s Study Center, Child Mind Institute, Manhattan Psychology Group were three organizations that provided me a huge amount of valuable support. And I can now say with confidence that I’ve probably had as much parent management training over the last seven years as I have had work based skills training, which has helped me be a better mom to my children. I think what surprised me was exactly you know what you asked, it did help me be better at compliance and be a better risk professional.

Denis Camilo 7:59
Now, what have you learned in your parent management training that translates into running a large compliance program?

Lauren Munfa 8:05
Yeah, Denis, I was quite amazed at how much actually translated from parent management and cognitive behavior therapy training to running a large compliance program. I have three things in particular: incentives, effective communication, and understanding the antecedent or the why.

Denis Camilo 8:23
Interesting. In compliance. We speak a lot about incentives and using the carrot and not the stick. Do you see that in practice?

Lauren Munfa 8:32
You’re right. We do speak about incentives. And for good reason, we saw the importance of getting incentives right during the financial crisis. Right before the financial crisis, I had moved from compliance into a role as the Chief of Staff for the co-heads of Goldman’s Investment Management Division, which combined private wealth management and asset management, which was a fascinating seat with very little sleep. Thankfully, I wasn’t married and didn’t have children yet. And at the time, the press was focused on how detrimental or short sighted incentives contributed to the crisis. But I think as an industry, we have now come a long way. firms have more robust compensation practices, we are constantly challenging where there may be misalignment of risk and reward. We’ve established violation frameworks that have more consistent and timely consequences, where staff can take a calm pit, if there are patterns or significant violations. But what parent management training made me want to do is find ways to go even further, to incentivize positive behavior, not just eliminate poor incentives. However, warning, it is not easy to change behavior, it definitely takes work and commitment.

Denis Camilo 9:49
Please do share. What did you learn in the parent training that might help moms or risk professionals alike?

Lauren Munfa 9:57
Yeah, like all good compliance professionals, I have to start with a disclaimer, I am not a trained parenting expert or a social worker. So, take this information at your own risk. But what I learned is that an effective incentive structure needs to have three things. It needs to be rewarding, immediate, and consistent. I think the first point seems pretty obvious, the reward must be rewarding. My husband and I tried to encourage all types of reinforcers with our children, and those can range from material reinforcers, toys, clothes, candy, activity reinforcers, your time with us, a play date, an extra baseball game to watch during the week, social reinforcers, praise or token reinforcers, which is essentially points used for more valuable items. But the most important thing is that my children have to choose it, and it has to be motivating to them. This also means the rewards need to change to stay effective, not gonna lie, I made mistakes early with our children’s reward systems. For example, at first, my daughter wanted $1 on her reward chart tied to the token economy. So when she listened the first time or completed her morning routine on time, she would earn a point towards a reward. But one morning, she was almost finished with her morning routine, but was going to be a few minutes late to school, because she didn’t want to put her socks on. And for whatever reason my daughter prefers smelly feet to socks. And I gave her a look. And she said, Mom, you know, it’s okay if I don’t earn the point because I want clothes and you buy clothes for me. And I was like, wow, she’s totally right, I was undermining what I was trying to accomplish. So now if something’s on the reward list, only positive behavior or compliance is the way that our children can earn it. I also realized on the immediate and consistent component that it’s really hard to consistently catch and recognize the positive behavior. For example, waiting patiently can be really hard for my son and nearly impossible when I’m on a work call. And it’s really easy for me to miss the fact that he’s waiting patiently and say, Great job waiting patiently, or I like how you found something to do on your own while you waited patiently. But I promise you that it is super easy to notice when he’s not waiting patiently. And usually my coworkers who are on the call with me notice it too. So I adjusted and started having my caregiver try to find those opportunities where I was on my call, and he really wanted to disrupt me, but he held back so that I could recognize that after a call and immediately praise him for it or reward him. Timeliness is also really, really important. You know, I was worried I would start to look like a dog trainer handing out treats. But I realized that the reward didn’t have to be something material. It could be as simple as that immediate label praise. So something like you know, good job coming to the table, you get 500 points. And you know, we were keeping track of the reward points throughout the day. So like, once I started doing this, what I realized was how little I was truly incentivizing positive behavior in the past. I had grown up where there was an expectation that I would just comply. And luckily for my mom, I just did, or at least that’s what she tells me. And it’s the same at work. We often expect people to comply, and maybe even take for granted when they do. And there should be continued dialogue on what more we can do to recognize in a way that is rewarding, immediate and consistent when people get things right up front.

Denis Camilo 13:42
That is really interesting. Are there examples of how you think his way of thinking could be applied differently at financial institutions?

Lauren Munfa 13:50
Yeah, it’s a constant conversation. But one recent example under the FINRA rules financial firms have an obligation to create heightened supervision plans in situations where staff have engaged in poor conduct and the traditional heightened supervision plans often monitor to ensure those bad things don’t happen again. And the absence of bad things over a certain time period removes the person from heightened supervision. Last year, we went a step further and started discussing a plan where we needed to see a certain number of examples of the person doing the right thing. So where doing the right thing was active, not just the absence of the wrong thing. Something else my firm did a few years ago was rollout the concept of kudos. Kudos is our peer to peer appreciation program. It allows you to give public or private thanks to your colleagues in the form of a card or points that translate into items that can be purchased. And I love this idea, I think it has made a difference, especially with junior staff encouraging behaviors, which are core to our firm’s values. And those are accountability, collaboration, innovation. I like this idea also for compliance and actively discuss with my team ways to praise or recognize good compliance behavior in our daily interactions with the business.

Kimberley Cole 15:19
This episode is brought to you by Protiviti. Protiviti is a global consulting firm with deep expertise in transformation, risk management and compliance, partner with Protiviti and face the future with confidence.

Denis Camilo 15:37
We were speaking before this podcast about how to give an effective command and I found it very fascinating. Can you share what you’ve learned, and how to apply it at home and at the office?

Lauren Munfa 15:49
One of the many things I learned in parent management training was how to give an effective command. And I remember thinking when I sat there for this lesson, you know, how hard can this be? My job is to tell people what to do. But it was super eye opening. I needed to be more direct, more positive, more specific, give more choices, make it simple, have a more polite voice, only use it when necessary. And it went on and on and on. And I became very self aware on my commands at home. For starters, every time I asked my children to do something, I realized I would say, okay, at the end of the sentence, so it’s time to your homework, okay, or go to bed okay? So instead of sounding like it was something they really needed to do, it sounded like I was asking them a question. And they had the ability to say no, so I needed to be more direct. I also stopped telling my children what not to do, and started telling them what to do. And in parent management training. This is called using positive opposites. So the example I give is, instead of saying, Please don’t spill your food on the floor, I now say please lean over the table when you eat. I’m very excited to say that the mats that are on the floor have now been thrown away, and we have successfully achieved mastery of leaning over the table. We also practiced making commands specific. So instead of saying please behave, which doesn’t really describe the behavior, I’ll now say something much more specific, like, please use an inside voice. I also adjusted when I used commands only using it when necessary. So I was giving a lot of commands at home and then feeling frustrated when I wasn’t getting compliance. And interestingly, when I reduced the number of commands and started giving information, it had the opposite effect. So instead of saying come to the table to eat dinner, I’d say something now like geez, the food looks so delicious at the table, but it might be getting cold. And then when my kids come to the table, I say great job coming to the table. I also started cutting down on my words and making my commands a lot simpler. So instead of saying put your socks on and get your black tennis shoes and put your raincoat on, I would just say socks and point to them. Once the socks are on, I would say come to like walk to the shoe closet. And then I would point to the shoes, you know, and this worked effectively because we had to break it down to create the muscle memory and get to mastery. And then lastly, we spent time on the importance of giving options and choices which gave my children that feeling of control. So you know when my daughter wants to have a piggy night, which is what she calls a night without cleaning, I give her a choice. You can have a bath a shower or a bath with a bath bomb. And usually they choose the option with a bath bomb because who doesn’t want to see the water fizzle and change colors? So a lot to learn on my language around how I was asking my children to do things and that did impact my compliance leadership. As a compliance officer your title comes with a lot of power. You can try to exert your authority through demands but it likely won’t work. Or if it does in the short term, it may not for the long term. So, you know, I definitely spend time with my team, talking to them about tips to increase compliance. Specifically, I think there’s a benefit in being factual. So rather than commanding compliance, we’re more effective where we support the business and getting to the right decision themselves. And it gives us good information on their risk mindset and helps build their problem solving skills when they get to the right outcome. Giving alternatives and choices, I think is very effective in compliance. One of the most common complaints I hear from business is compliance is always telling me no, and I don’t think that’s an acceptable answer. First of all at banks, the business owns compliance, we need to lay out the alternatives, highlight the pros and cons and the risks to each. You know, the risk might be you might go to jail, or you are violating the rules. And if the business lands on the wrong spot, we escalate, and we keep escalating. But, you know, I’m fortunate that I haven’t seen that have to happen at my firm. Focus on procedures, I think compliance policies often cover what not to do, but they don’t get to the how. And there’s a lot you gain when you focus on the process and the mechanics to comply with the rule. I mentioned before cutting down on words, and that’s going from, you know, complex set of instructions to a very simple set of instructions. I think simplicity is very, very important. Because complexity can kill compliance, it can increase the risk of human error, it can lead to operational risk issues, I try to empower my team, and to challenge where something’s overly complicated or manual. I also make sure that we’re specific. So for example, in compliance, we can say things like, disclose all conflicts of interest or escalate reputational risks and policies. But what does that mean? Does it leave it open to interpretation, you’re so much more effective when you have specific definitions or guidance. So in the case of conflicts and reputational risks, that’s tangible examples of risk scenarios or themes.

Denis Camilo 21:21
And you mentioned earlier, understanding the antecedent. What exactly does that mean?

Lauren Munfa 21:26
Now, the curious thing about my parent management training is that it’s not just about your child, it’s also about you. And you have to behave and think differently in order to change the behavior of your child. I remember being surprised at first because I thought I could just drop my child off for therapy, like tutoring and they would come back more compliant. But in order to change the way that they behave, you have to change the way you behave. And you have to understand the antecedents. These are the events that happen before the problematic behavior occurs. And if you can identify these and mitigate them, you can prevent bad behavior. So you don’t have to deal with the consequence, which is what comes after the behavior. So in our sessions, we were told to think like a scientist, so experiment week to week and evaluate that if we changed our behavior, how it would change our children’s. So for example, when my son was young, he would play with a toy, usually his trains, and then he would walk away, my daughter would pick up the train and start playing with it. My son would say, give it back, she would say, no, he would get upset yell at her, she would give it back. And this sort of thing would play out over and over again. And it was really easy at the time to say, Well, my son just needs to be more flexible. Or he needed to go to a timeout. But we were taught to stop and ask ourselves, like, why is this behavior occurring? Because behaviors happen for a reason. And when we started asking the why, and really analyzing the problem and the sequence of events, to identify what happened, why it happened, and what could be done to prevent it from happening again, when we did this, we noticed some interesting things. We figured out that my son was upset because in his mind, he was still playing with the toy, even though it looked like he wasn’t. And so we were able to then help him by teaching him to tell his sister that he was still playing with the toy before he walked away. And we explained that if he didn’t, she would have no way of knowing that he was still playing with it, because his body language said otherwise. We also noticed that my son had very low tolerance to no as an answer. So we taught him to ask his sister, can I have the toy when you’re done? And the answer inevitably to that was yes. And he accepted that much, much better, even if it wasn’t an immediate access to the toy. We also noticed that he was being reinforced by yelling. So when he yelled at my daughter, she would give it back to him. And so we started jumping in during those times, and asking him to try again. And he couldn’t have the toy until he asked nicely, and when he did, we would praise him we’d say, great job asking nicely. So he would start to see that actually asking nicely gets him what he wants. So this is a very long winded example. But it’s the type of analysis that’s not entirely different than what we do at the office around root cause analysis, experienced compliance and risk professionals should be very familiar with how to get to the root cause of a problem, to help avoid the same situations happening again and again. And I bet actually, more experienced risk professionals probably use this thinking more in their work environments, and much less than their home settings. I found running compliance and operational risk, it’s not totally uncommon for junior staff that are less experienced to get the root cause wrong, and just one or two why’s away. And you have to keep asking why. And we talk a lot about this, what is the root cause of the root cause? So for example, if you examine a fraud event where someone lied, it might be very easy to say the root cause was a bad actor and stop there. But a series of other why questions such as you know, why did compliance trust not verify? Why did no one else who saw red flags speak up? It might give you a very different root cause. So this type of thinking does apply in the home and at the office. And we do need to make sure we’re hiring risk managers who are going to peel back the onion to find the problem, gather information, look at causal factors, determine the root cause, and then come up with solutions.

Denis Camilo 25:46
Thank you, Lauren. Is there anything else you would like to share about parenting and compliance?

Lauren Munfa 25:52
Yeah, thanks, Denis, I hope folks found this interesting. You know, I’ve learned a lot in my parent management training that I think translates into running a large compliance and operational risk program. I do realize that I’ve spoken a lot today about how to drive more compliant behavior at home. But please make no mistake, it’s incredibly important not to build children who are simply rule followers, it’s actually the opposite. I want my children to be smart and curious risk takers, and be their own problem solvers. So for me, I’ve been thinking a lot about this as well. It means I need to build trust, and children have to know that you’re in their corner and you support them 100% so that they feel comfortable sharing what they’re thinking. And you can start to build that problem solving toolkit together. Because I work long hours, I only have about 45 minutes at the end of every day to spend with my children. And there’s so much to get done during that time. But we’ve started to build in a check in when the lights are off, where they share with me how they’re feeling. And with my daughter, we’ve made it fun. At night, we turned her colorful lights on around her room and hanging from her canopy and that touchpoint has become very, very valuable to making sure they know I’m listening. They have a voice to identify their individual needs, and I can help support them, especially as they navigate the more sophisticated social dynamics. And obviously we all appreciate that a listening culture and understanding your stakeholders is critically important with your compliance and operational risk departments and making both a success.

Denis Camilo 27:33
I’ll take a lot of that advice with me today. Well, that brings our 2022 podcast series on Risky Women Radio to an end. But we look forward to our 2023 discussion. And thank you, Lauren, for joining us today and for your thoughts and valuable insight.

Lauren Munfa 27:50
Thank you Denis. Appreciate it.

Kimberley Cole 27:54
Thank you for listening to this episode of Risky Women Radio, be part of the ongoing conversation and learn more about our events and other programs at riskywomen.org

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