Corporate compliance officer reviews crucial compliance content at his desk.
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February 5, 2019
    Article highlights
  • Roles and Responsibilities of a Corporate Compliance Officer
  • Benefits of an Effective Corporate Compliance Officer
  • Setting Up Your Compliance Officer for Success

Like most business professionals, you probably wouldn’t argue about the importance of corporate compliance and why your organization needs it.

You understand that effective corporate compliance plays a key role in operations, helps govern internal policies and rules, and assures that employees follow federal and state laws, regulations, standards, and ethical practices.

The key to a well-run compliance program? Having an effective Corporate Compliance Officer (CCO) at the helm rather than just a figurehead with no real power.

Roles and Responsibilities of a Corporate Compliance Officer

According to Corporate Compliance Insights, the Corporate Compliance Officer was “traditionally viewed as a compliance cop,” which has a negative undertone of someone sniffing out infractions, looking for wrongdoing, and pouncing on violations.

Now, the view takes on a more positive connotation of someone who is asked “to champion corporate integrity, accountability and ethics.”

While the end-goal is the same (managing risks and protecting the company), the Corporate Compliance Officer is taking a more prominent, senior role in the company.

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Because of this shift in perspective, many top leaders are a bit unsure what to expect from a CCO, both at the micro and macro level of compliance and accountability.

What does a Corporate Compliance Officer do? An effective CCO handles these common tasks:

  • Manages policies and procedures. Often working with a compliance committee, a Corporate Compliance Officer creates needed policies and procedures to ensure the business complies at the federal and state levels. The CCO then communicates these policies and procedures to employees, provides training to educate staff, and attests to employee compliance. Due to ever-changing risks, the compliance officer maintains and revises policies and procedures as needed – communicating and training every step of the way.
  • Monitors compliance. Who’s complying and who isn’t? An effective Corporate Compliance Officer measures and evaluates compliance throughout the company, from top to bottom. They also work with other departments to coordinate compliance activities, keep abreast of compliance status, and identify trends.
  • Investigates possible violations. While the goal is to prevent unethical, illegal, or improper behavior, violations do sometimes occur. It’s the job of the Corporate Compliance Officer to probe any incident or alleged violations that may deviate from legal or regulatory requirements.

Benefits of an Effective Corporate Compliance Officer

According to a 2016 study by Deloitte, only 33% of companies have a designated Chief Compliance Officer as a standalone position, and 21% don’t have one at all. Not surprisingly, the smaller the organization, the less likely to have someone in this designated role.

But when a company invests in a designated Corporate Compliance Officer position, it establishes the importance of the role.

It sets the tone that, in this full-time role, the officer will protect the organization, hold employees accountable, and lead a culture of compliance. This goes far beyond tasking a staff person to police policies as a small part of other job responsibilities.

If your company doesn’t yet have a designated Corporate Compliance Officer, here’s what this staff position brings to the table.

Corporate compliance officer reviews policies and trends with another employee.

A holistic view of the issues

A Corporate Compliance Officer provides a wide-angle, bird’s-eye view of the company and compliance issues, seeing broad trends and identifying new risks before they become issues.

Because compliance is the primary focus of this position, a CCO can look at it from different angles, think strategically, and make better decisions than if he were putting out fires or addressing immediate problems.

Having this designated role is key to the compliance program’s effectiveness.

Proactive issue resolution

With the time, resources, and the holistic perspective mentioned above, a Corporate Compliance Officer can head off issues before they become major problems.

For example, rather than taking a reactive stance after a violation occurs, a CCO can stay on top of preventive measures like compliance training and tracking on a company-wide level.

They ensure that employees carry out all business activities within the regulatory framework.

Consistent accountability

For a compliance program to be effective, there needs to be a measure of accountability built in to ensure employees are following the policies and procedures set forth for them.

One of the key benefits of having a Corporate Compliance Officer, then, is the consistency they can provide between divisions, locations, or job roles.

Everyone from the top down will be held to the same standards, and the CCO makes it happen.

Reduce liability

Because compliance is the responsibility of the compliance officer, the duties when performed successfully, protect the company’s reputation and resources.

Robert Walters, a global recruiting agency in compliance and risk management points out that a Corporate Compliance Officer is “charged not just with keeping a company’s business dealings ethically sound and legally pristine, but with educating the entire company and instituting practices that will ensure the highest possible level of compliance.”

To that end, a CCO with the power and authority to effectively do the job can reduce risks, improve decision-making, avoid lawsuits, lessen the severity of claims and penalties when violations happen, enhance company performance, boost profitability, and maintain a positive reputation.

Setting Up Your Compliance Officer for Success

According to Corporate Compliance Insights, “Historically, corporations handed compliance oversight over to their general counsels. Today, the smart trend is to separate the legal and compliance responsibilities due to the inherent conflict in the roles.”

With that in mind, how can you ensure that your Corporate Compliance Officer will be effective in the role?

Ensure they are properly empowered

Top leadership needs to demonstrate a commitment to an effective compliance program, otherwise, the Corporate Compliance Officer will be toothless.

This could be naming the person to the C-Suite, such as a senior corporate official (usually called a Chief Compliance Officer). At the very least, leadership should bestow the CCO with the authority to make decisions for all employees.

Develop a culture of compliance

An effective corporate compliance program infuses ethics and integrity into the fabric of the company and institutes a system of check and balances at every level.

The Corporate Compliance Officer establishes the critical importance of risk management and compliance and makes them regular topics of conversation in the company.

This means communicating to employees about compliance issues and changes to policies or initiatives.

It means communicating to leadership about compliance successes and reduced liability. And it means communicating expectations to all levels through ongoing employee training.

In essence, it’s about regularly putting compliance issues in front of employees and making it a point of emphasis throughout the entire company.

However, the International Compliance Association says that developing a culture of compliance goes beyond the basics of employees knowing they have individual compliance responsibility and understanding what is expected of them.

Tapping into a bit of psychology (i.e., showing people the benefit of complying) is a key component for success. “It is this ‘wanting’ to be compliant that is the final step in achieving a compliance culture.”

Corporate compliance officer walking and talking with a younger employee.

Leverage technology

The larger the company, the more complicated it can be to manage communication, policies, and training.

Email isn’t enough when trying to convey complex and weighty compliance matters. And pulling employees away from their jobs to attend in-person training or meetings to discuss these issues is difficult to coordinate. Plus, it’s expensive to lose that productivity.

You might want to consider a compliance management software to help keep all of this in one location – storing everything centrally, tracking progress, and automating processes to make sure nothing falls through the cracks.

That’s where PowerDMS comes in – it is a cloud-based solution to store and track all of your compliance documentation, including policies, procedures, directives, training, and more.

With compliance at the heart of your company’s operations, it makes sense to have a designated Corporate Compliance Officer on staff to oversee compliance efforts and champion ethics and integrity throughout the organization.

By understanding compliance officer roles and responsibilities – as well as the benefits of an effective Corporate Compliance Officer leading the way – your company is well on its way to demonstrating its commitment to compliance, accountability, and ethics.

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