hello and welcome to the fourth and final part of our problem gardening series on the jay huddle so far we've aimed to bring you honest and thought-provoking insight and we hope you've gained a lot from watching the first three episodes we're aiming for more of the same with perrin carey in our final installment hi perrin thank you for joining us today hi tim thank you very much for inviting me i'm looking forward to the things that we're going to discuss my challenge challenge a few people including you and me certainly a pleasure to have you on um for our viewers who might not know we spoke a few months ago when it was it was still locked down so it feels like yesterday essentially um but we we spoke about um responsible gambling issues for gambling inside a magazine and that article is still available to read on gamingcider.com just to throw that out there but um today we're kind of uh for our audience we're looking to follow up on that and it's obviously part four the final part of our um problem gambling series so uh i think would be useful for maybe for our viewers um just an intro question perrin can you tell us um a bit about what you currently do your work and research and also um if you want a bit about your experience in the gambling industry yeah sure thanks tim um yeah i guess from my perspective uh my experience in the gambling industry first of all that might kind of place uh a reason of why i might even be here um i was recruited um into stride gaming plc which obviously is now um rank group and for those of you that remember um obviously one of their subsidiaries um dawg was fined um seven million uh back in 2018 and my role was to essentially resolve that issue so my experiences within the gambling sector are essentially to resolve financial sanctions from the uk gambling commission my reason for i guess being pulled into the gambling sector was my 20 years of experience uh working within um regulatory compliance uh governance and risk management um in other sectors including including financial services and actually international education and what am i doing now about a year ago set up a startup business focusing on governance risk and compliance um but using um research in order to try and interrogate these um essentially concepts that we talk about so what is compliance what is governance and i think these are some of the things that i hope that you and i are going to sort of talk through today and and how we can begin to try and move these forwards but using an evidence-based approach i hope that helps yeah yeah absolutely and as you say what we discussed before was it was kind of as you say uh compliance uh governance organizational culture these kind of things that of course responsible gambling which is affected by kind of all of these things um since since we last spoke on what have been uh some some kind of maybe key developments and areas of your research in the last few months okay so what we have done from our um research is we've tried to look at what exactly governance is and how governance itself interfaces uh with this thing that we call compliance and i know that sounds a bit kind of philosophical but we believe it's really important because fundamentally we believe and i think most people would agree organizations are just a bunch of human beings gathered together for a particular purpose and and therefore it's really really important to bring that human element within to these concepts of governance and compliance and this has really been the cornerstone of the work that we've been doing over the last 12 months and we've developed a piece of technology which we call govandisia essentially governance indicators and essentially it's a piece of technology that helps us to get human data outcomes on the performance of governance within an organization and how that affects compliance and it's an evidence-based research program developed into a piece of technology and it supports organizations to improve governance and compliance outcomes but but using humans as the evidence brace yeah all makes a lot of sense uh an important area to to kind of work in and and on that note i think we can maybe delve into the first kind of um kind of meaty topic that the something you've talked about before um link to your research in what you've said to me um in the past is is compliance doesn't really exist now um you know we're laughing to them and yeah someone might hear that and think you know what on earth what does that mean can you sort of tell us more about that yeah i think what i'm saying in summary is if we look at an organization that has regulatory obligations we talk about this concept of are we compliant we raise that question and i've had it posed to me many times you know sitting in a boardroom presenting my monthly or quarterly report as chief compliance officer perrin are we compliant and as i thought about that question month in month out quartering quarter out i realized that actually my true response if i was actually to answer would be no we're not and the reason for that is actually because compliance itself is is a an idealistic outcome essentially it says we are totally completely and utterly compliant actually compliance therefore doesn't exist it is something we aim towards don't get me wrong but it itself doesn't exist so what does exist and this is why it's quite important to acknowledge that compliance doesn't exist is that therefore what does exist is non-compliance and i think this really begins to then bring our focus back into okay so if non-compliance exists how are we mitigating the reduction of that how are we actually putting in place systems and our main systems holistically not just policies procedures and controls but what systems are we putting in place to reduce our levels of non-compliance because ultimately that's the question and i think my reason for raising the the kind of statement and being slightly provocative is that it begins to get us to really think about what's the actual problem here the problem is non-compliance the problem is not compliance itself yeah um i'm tempted to say that that makes sense but it's it's one of those that it makes you think um and certainly i i can definitely see where you're coming from um in ter in terms of this i think something we spoke about in our previous interview organizational culture really is is key to this and i know something else that that you you focus on is is obviously uh governance and sort of linking the two together um something you've said is um governance is kind of not that well understood and could ultimately be a troublesome topic can you maybe again expand a little bit more on this uh thanks tim yeah okay i don't really like the word governance because i think it steers us ironically because that's essentially what governance means to steer but the word itself steers us towards this idea of of rules and frameworks and committees and as a consequence we've we've built over time um as a result of many kind of precursors for example enron and other corporate governance failures this codification of governance and i think this is troublesome not because i don't disagree oh sorry i don't agree with it because i can see the benefit of it it it provides us a framework but again it just becomes another compliance outcome so for me when i go into an organization and i want to talk about this thing i call governance i actually rephrase the question and i actually say okay so what's your murmuration factor as you can imagine that gets a very confused look when i go into a boardroom murmuration is this wonderful spectacle that we see that starlings do when they flock together and essentially it's this wonderful kind of fluid dynamic constantly changing shape of this collective and cohesive group of birds so what i think governance looks like and what i think we should describe governance as is murmuration because if we live in in the most uncertain times that most of us have ever experienced organizations are day by day looking at their own survival and how they're going to manage that week by week month by month where are we going to be five years time is irrelevant even one year time is almost irrelevant where are we going to be next month some organizations where are we going to be next week this creates a really volatile environment so actually rigid frameworks from the concept of governance are not going to serve us well what we actually need is very fluid and dynamic governance frameworks and for me the best visual representation i have of that is murmuration so what we do is we actually measure and quantify using human data how well an organization is murmurating we don't measure governance although you could call it that we actually measure how well an organization is able to murmur so if we were to kind of break this down in a practical sense and obviously in this kind of wider conversation we're having responsible gambling and obviously this is part of our problem gambling series um how does that concept kind of affect let's say um an operator in in the pandemic how they're sort of um interacting with their customers and what you know what systems they they have in place to reduce gambling harm absolutely fantastic question okay so i think the first thing let's go back to our idea of mitigating non-compliance first of all so all right all of our regulated community are essentially obliged to to comply with those regulations we know that that isn't going to be perfect and i think in the conversation that you and i had um in our previous interview we talked about this idea of mitigating risk being the priority outward risk and inward risk and what i mean by that is obviously customers pose a risk to organizations because they may be involved in financial crime yeah but equally organizations pose risks to their customers and obviously this is the social responsibility piece um that we talk about so how does all of what i've said previously fit in to this particular issue in order to mitigate risks what we tend to do and i think it's appropriate is to implement policies procedures and controls and those policies procedures and controls align to the risks that we believe we have and that's perfectly sensible yeah if you have a risk what's the risk how can we reduce that risk let's put in a process that means that we're going to follow that process and mitigate the risk and and don't get me wrong that works but it doesn't create a very fluid and dynamic organization because by nature policies procedures and controls are regimented and they are built around a very static framework what we're learning from organizations that are able to be fluid and dynamic is that they're shifting they're not removing but they're shifting some of their focus away from policies and procedures and controls which is essentially a process-based decision-making yeah and they're moving towards the values and purpose based decision making framework now values and purpose we know from the research are absolutely paramount for the success long-term success and sustainability of an organization it also builds the foundation of this thing that you mentioned before which we call culture there's a wonderful description of culture that i think i mentioned to you before by seth godin and he simply says culture is people like us do things like this which begs two questions who are people like us and what do we do and and that is culture whether you're inside a gambling operator whether you're part of a book club whether you're the member of a football team these are just groups of humans and within those groups of humans we have culture it exists everywhere and what's interesting and what we find is that organizations therefore that have both process-based decision-making and also values and purpose-based decision-making and they map those very closely and align them that those organizations are much more dynamic they're much more agile they're much more able to operate in times of uncertainty and this is where we talk about a murmuration factor how how agile and how able is your organization to respond to the uncertainty that's around you but at the same time ensure that you mitigate the risks of non-compliance i've got a short follow-up question doesn't mean a short answer but the short question from me how can a gambling company or the industry more widely do that and become more fluid and ultimately pose less of a risk to its players as a result okay really really interesting question the research that we're doing is is beginning to deliver some interesting outcomes the research that we're doing with organizations is telling us that those organizations that are more purpose-led and more led are actually resulting in a a less dehumanized approach to business now what's interesting is we attribute um we attribute names we attribute particular tags so to our stakeholders so you know when we talk about governance we talk about stakeholders as we talk about our suppliers we talk about you know and i think what we're finding in our research is that organizations that view those stakeholders as groups of humans they actually engage with those groups with more empathy more understanding of their circumstances and i think what we're seeing in those that are enhancing their social responsibility to a degree which goes beyond just regulatory conformity is that customers are actually seen as human beings and this is why there is a connection between seeing customers in huma as human beings and being slightly less procedure and control driven because if you're procedure and control driven actually your decisions are not being made about individual humans your decisions are being made as a consequence of process whereas if you bring in an element of values based decision making so think about your corporate values bring those values into the decision-making process then actually you you bring the human back into the decision-making process and we realize from the research that's emerging from us and and also from other areas around the world look at look at the work that the fca is doing in the uk within financial services they're seeing the same thing if there's an emerging culture with an organization that humanizes their customers actually the decision-making that goes on about those customers actually becomes more compliant because the customer is seen not just as a result or the end of a process they're actually seen and there's empathy that exists between the decision maker and the customer i hope that that kind of makes sense there's a lot of stuff going on there so i do apologize if if i'm not coming across clearly no i mean hopefully 12 years it's clear to me that's clear and i i guess a point it raises for me personally is something i'll probably mention to you again a few months ago um sustainability really because i think um you know ceos are and cfos are under a lot of pressure and the human thing to do is you say that the more compliant thing to do is is take a less dehumanized approach um but you know a ceo and a cfo will still have a business case to answer to but but ultimately um you know being being responsible and and more less dehumanized sorry as you say um surely in my view that can only help financially because a business is more sustainable that way and that's what the evidence is suggesting not just within the gambling sector but if you look at other businesses certainly within financial services as well businesses that are beginning to adopt this purpose and values driven approach to creating their culture and supporting their decision making are seeing less essentially drop out of customers all right so your your engagement with customers becomes more human yeah your um your decision-making around those customers in terms of obviously within the gambling sector you know you look at the limits that you're providing for customers you look at how those are fluctuating and changing understanding the personal circumstances of those customers and looking at obviously the information that's coming back from interactions you know all of these things understandably are being embedded into process and and into procedure and of course that has to happen i'm not saying throw that out you know don't throw the baby out with the bath water of course you you need policies you need processes and you need controls but you also need this values-based approach as well because it supports actually a long-term sustainability of the relationship with those customers with the people that are essentially paying you for the service that you provide which is you know a wonderful piece of entertainment and it's really really important that you create that long-term relationship with your customers you know this this idea of of kind of you know turning and churning your your customers as quickly as possible actually if you think about the financial long-term sustainability of that it's not feasible you know you will reach a dead end there are a finite number of people within different jurisdictions uh and and the more you turn and churn the less people you're going to have in order to to habit your customers it makes far more sense to develop a long-term value-based um relationship with your customers yeah i think a key point you make there is is the the entertainment factor and uh it's a point the industry make a lot and i personally feel you know gambling and betting um even if you lose a bet if you've got entertainment from that that's that's the the whole bottom line of the product um but like you say i think it's more about actually reflecting that internally and maybe not just using kind of uh an operator using that as rhetoric for example um we've talked about a lot already but i've got a couple of final questions for you and quite forward-looking ones and what we're talking about now is is actually quite poignant uh given there's a gambling act review sort of coming up um oh well it's sort of underway already in the uk um on that note com what's what what is in your view is is the future of regulation i know that's quite a bad question sorry but but you know it is a broad question okay when i when i try and look at the future of regulation it's often useful to look outside of the sector that you're in and in in the many many um dealings that i had with the uk gambling commission um it was very clear that they also look outside their own sector for um you know what are the emerging ideas within regulation how are we going to move forwards and and try and combat what we we need to do but at the same time have a forward-looking regulatory framework so i know there's a lot of interaction between the uk gambling commission and the financial conduct authority for example if you look at the work at the financial conduct authority this is what the ukgc is looking at you will see that they have for the last four years been really looking at culture and they've been really looking at accountability and i think we we had a brief conversation about accountability and responsibility in in in our kind of previous chat but but there is a difference between them so responsibility is is essentially i take on the responsibility for this task so it's a task orientated ownership accountability goes beyond that accountability takes responsibility for the outcome of that task and what the fca have been working towards and what i can see as it emerges from the ukgc um is that accountability is something that they're very very interested in and very keen let's say for operators to adopt and adopt fully so if you look at um the report the enforcement report in 220 from the ukgc you'll see that they've been they talk about accountability and they talk about the fact that accountability needs to be accepted more not just at board level but actually it needs to start drilling down and across our organizations because actually accountability um helps decision making because if you're not just responsible for the process you can at the end of the day you can go home and i say i i followed the process but if you don't think about what the outcome of that process is then of course you remove yourself from what that outcome might be um so what the fca are doing and i know the ukgc have been talking about even you know in since i you know since i moved away from the sector um you know about a year ago they were they were really interested in following up on this idea of accountability and then the other aspect is is culture so i think we're going to see an increased focus on how organizations are instilling essentially a positive culture within their organizations and with their interactions with all of their stakeholders so customers third party suppliers etc and and this obviously then feeds into this idea of of how do you make decisions about those customers how do you use the information that you have from your social responsibility interactions to make those decisions how are you documenting that and then you you so you fall in this cycle of what's our culture how are our decision-making and how are we accountable for those decisions so i wouldn't want to be the one with a crystal ball but um the the fca have have obviously introduced the senior managers reporting regime um which is essentially a a list of individuals who are absolutely accountable um and will be held accountable for decisions that are made um within their organizations uh and that is spreading so that's a spreading framework and i wouldn't be surprised if you see a similar framework uh being looked at and adopted um across the gambling sector within the uk within the next 12 to 18 months um it's a way of embedding um an improvements in culture it's a way of instilling accountability vertically and horizontally within an organization yeah as you've just described needless to say plenty going on in this area and and very parallel to the future of regulation my very last question for you is um what's the future of of compliance and compliance in in in the way that we've spoken about it today but i like to frame that in two parts what's the future if what we've discussed is embraced um you know when it comes to culture or all the topics we've discussed and sustainability and perhaps what is the future if if companies just you know decide this isn't for me we're going to go with we're going to carry on the way we we always have been the last question is probably the easiest to answer i guess what would happen if you if you don't start adopting um these approaches i think what you'll find is um that the regulator won't be particularly pleased and you'll find yourselves on the wrong side of the regulator as we've seen with with organizations in the recent past and i think your sustainability um will will not be addressed you won't be a sustainable organization one you won't be able to adapt to the changing environmental um frameworks around you you know including the uncertainty that we now live in and but also you won't be able to respond to what's only going to get a more difficult and challenging regulatory space with regards to compliance and and what the future of that looks like um i think despite everything that i might say i don't think the term is going to disappear um i think it's it's definitely here to stay and and that's obviously uh you know good good i think um we just need to understand the difference between them but i think what we're going to see is compliance is going to really have to address this concept of culture and certainly within financial services this is something that has been pushed probably for the last 10 to 15 years i think they've made some progress but i think there's a lot of progress to make so i think compliance is something it's going to have to not only understand policies procedures and controls and how you mitigate risk through that they're also going to have to understand human behavior and why humans make decisions that we do and we've touched on it a little bit today when we've talked about accountability we've talked a little bit when we talk about values-based decision-making and the importance of that but there's one other very small kind of addition that we really need to think about and this is as human beings all of our decisions are actually driven by emotion and not by cognitive process so although we might think that we're reasoning individuals and generally speaking we come across as being that actually when we make decisions um 99 98 of the process or the actual decision itself occurs within um the section of the brain that's responsible for emotion and this is why making values based decision making enhances the role of compliance within organizations because if you make a values-based decision rather than just a process-based decision you're engaging with emotion and if you're looking at your customer as a human being you're engaging with a values-based decision you're emotionally connected with that other human being even if you don't know who they are so it improves your decision-making process and essentially makes you more compliant so i think the future of compliance is still pursuing policies procedures controls absolutely we need those but i think it's really looking at human behavior human decision making and therefore bringing humans back into our decision making process well paren thank you very much for for all your answers and all the insight some some really complex topics we addressed and i'm sure our viewers will gain a lot from them thank you very much tim thank you so much for the invitation it's great to be back and to be able to talk about the work and the research that we're doing no problem yeah thanks for your contribution and all the best thanks to all our viewers thank you for listening to all four parts of our problem gardening series we've spoken about the us side of affairs the psychological impact uh women gambling clinics and organizational culture and compliance today with perrin for all the latest on the industry news and more responsible gambling be sure to visit gamblingdecided.com thanks for watching