Friday, May 13, 2016

Am I a Good Compliance Officer?

 HCSI
What Does It Take To Be A Good Compliance Officer?

What makes a good Compliance Officer?  It’s a question every hiring manager, General Counsel and Board must consider when faced with the need or opportunity to bring that critical person into the business. 
The compliance profession is still in its infancy.  A couple of decades ago it started in the United States in the financial services and health care sectors, growing out of legal and audit and into its own role.  As the UK Bribery Act came into force and more multi-national organizations were stung with fines for failing to comply with all sorts of laws, companies began to hire compliance officers in order address the ever-increasing legal and regulatory expectations placed on them from all angles.  As compliance departments grow throughout Europe, Asia and South America, businesses must evaluate who to hire and how to determine what makes a good compliance officer.

What are the primary roles a compliance officer must undertake?

In many businesses, compliance is in charge of both compliance and ethics.  Compliance tends to deal with the policies and procedures that are put in place in order for the business to ensure compliance with the law.  Ethics revolves around doing the right thing, corporate values and training people to behave in a way that creates a culture of compliance.  While some organizations, particularly in financial services, separate the ethics and compliance elements, for most businesses compliance and ethics go hand-in-hand in one role. 

Compliance Officers are generally charged with three tasks: awareness, advice and reporting.  The Compliance Officer creates the compliance program and ensures that people throughout the organization are aware of it, which includes ensuring understanding of the law, rules and procedures enforced by the company.  Compliance Officers must also be able to advise on legal and compliant ways of conducting business, and then report to the business about program implementation and specific issues requiring resources or response.

What skills does a Compliance Officer need to have?

The most important thing a Compliance Officer needs is a deep understanding of the business.  Without a desire to know the business, the Compliance Officer will not be able to give helpful solutions to problems. 

Communication skills are also vital for a Compliance Officer.  Most Compliance Officers perform training or give updates to the employee population, managers or Board, so clear, compelling communication is essential.  Compliance Officers also need to be terrific listeners so that they can hear and understand the pressure points between the business and the law.  Compliance Officers must be persuasive and able to influence the business, especially when the procedures or policies may be unpopular or difficult but necessary. 

Lastly, Compliance Officers need to be skilled at designing simple and understandable procedures in order to mitigate the risks identified by the business.

How important is independence for a Compliance Officer?

Capacity for independent thought is crucial, as is a strong moral compass.  Although it is very important that the Compliance Officer be able to get along well with others in the business, there will invariably be times when the Compliance Officer must stand up for what is right, and not what is popular.  Ideally the Compliance Officer will have a direct reporting line to the Board and C-suite, so that any highly-contentious issue is dealt with at the highest levels of the business without the dilution of another function speaking for Compliance.  There is a strong trend right now in Financial Services and in U.S. enforcement actions to demand that the Compliance Department function outside the Legal Department.  This trend is likely to continue and is likely to become best practice throughout the world.

What else can a Compliance Officer do to be effective?

The best Compliance Officers are those who can embrace change.  The regulatory environment is an ever-evolving one, and just when a Compliance Officer thinks that the program is perfect, another law will come into force or an enforcement action will require the program to shift.  Compliance Officers need to be naturally curious with a can-do attitude.  If a Compliance Officer learns to say “no” effectively to the business using empathy and giving an explanation, it will go a long way toward building the trust that is critical for the Compliance Officer to maintain with management.

What role does enthusiasm or charisma play in becoming a good compliance officer?

Ideally Compliance Officers come to the job with a belief that what they are doing is important, valuable and helpful to the business.  It’s been said that the Compliance Department’s job is to protect the business in five years.  Therefore, short-term sales goals and actions which may create reputational risk must be eschewed in favour of long-term thinking about what is going to make the business sustainable and profitable in the future.  Compliance Officers who maintain a sense of mission, justice and proportionality will be successful.  A sense of purpose, enthusiasm for the job and natural charisma will draw people within the business to listen to the Compliance Officer, which can be helpful.

The definition of what makes a “good” Compliance Officer different when the person is working in a multi-national business?

Compliance roles inevitably become more complex when the business is multi-national.  Not only does the Compliance Officer have to manage differing, and sometimes competing laws, but there will also be questions of language and culture that can make the job more difficult.  Compliance Officers working in multi-national environments need to be incredibly attuned to the cultural differences within the countries in which their business operates.  A strong desire to learn about the other cultures will make a big difference.  People tend to listen to people who listen to them.  A good Compliance Officer in a multi-national company will be one who is aware that everyone comes with a set of expectations created by their culture of origin, and that listening and being aware is critical to the success of the compliance program in a multi-national environment.

What’s the number one way to determine whether or not you are, or have hired, a good Compliance Officer?

You know you are a good Compliance Officer if members of the business frequently come to you to proactively seek your advice.  If you’re providing smart, helpful counsel and engaging with them so that they trust you, then you are likely doing your job effectively.



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