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T. Rowe Price Hits the Ground Running
October 1, 2004
John Gilner was well positioned to move in as CCO at
T. Rowe Price, a large investment management firm in Baltimore
since the firm already had a director of compliance. This prepped
Gilner for many--but not all--of his responsibilities as CCO for
both the firm's mutual funds and its domestic investment
adviser.
Compliance: What is your background, and
how did it prepare you for your present job?
John Gilner: I am a graduate of Georgetown
University's School of Business Administration with a concentration
in finance. I went to the University of Maryland Law School, where
I focused on business. After school, I did tax work at Coopers
& Lybrand, then went to Legg Mason for 12 years, where I
focused on compliance. I joined T. Rowe Price in August of 2000 as
an attorney--again with a compliance focus. Earlier this year, the
T. Rowe Price funds designated me chief compliance officer, and I
was similarly designated as CCO for our domestic investment
advisers. Before the new rule, I already held a similar position as
director of compliance. So it puts me in a situation that has
evolved, rather than being new to the firm.
Compliance: So for T. Rowe Price, the new
rule didn't require creating a new position?
Gilner: Correct. It required "tweaking" as opposed to the
creation of an entirely new role. There are actually two roles. The
funds need a CCO, and the investment adviser needs a CCO. This can
be one and the same person. And in my case, it is.
Compliance: How do you handle third-party
providers?
Gilner: Other T. Rowe Price entities fulfill those
roles. I already have insights into the activities of these
entities, so I generally don't have the challenge of dealing with
unaffiliated service providers.
Compliance: So what is your biggest
challenge?
Gilner: Part of my role is to identify issues that
could have an impact but are not yet in the headlines. That is a
challenge. Our industry is dynamic; we have to continually critique
how we are operating.
Compliance: Could you be more
specific?
Gilner: For years at T. Rowe Price, we have
continuously sought to review our operations to identify areas
where we can enhance our controls. Management at T. Rowe Price has
always kept our funds' board well informed about compliance
matters. The SEC rule now requires one individual to be responsible
for reporting directly to the fund's board of directors on
compliance matters. That responsibility now formally rests with
me.
Compliance: What are you doing differently
now?
Gilner: In addition to my general compliance
oversight responsibilities, I am looking to see that we are meeting
the technical requirements of the new SEC rules.
Compliance: Who in your view is the best
type of individual to fulfill the role of CCO?
Gilner: It has to be an individual with breadth of
experience over a broad array of issues. There is an oversight
responsibility inherent in the CCO role. CCOs need to be prepared
to deal with the nuances of specific compliance issues that will
arise over time in various areas of the adviser's and/or fund's
operations.
