The Chief Compliance Officer: The Blueprint for Success in the Future (Part I of IV)

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OK, I admit it.  I have been — and continue to be– hyper-focused on the proper role and responsibilities for Chief Compliance Officers.  Not that I see any cause for alarm, but it is easy to lose focus in the sea of so-called hot issues — ESG, Diversity, Climate Change, Threats to Democracy, Cybersecurity and Data Privacy, each of which is an important component and focus for organizations.  All of these issues intersect, are interdependent and should be addressed through organizational commitment.

But I want to take a step back and return to an issue of importance — the proper role of CCOs.  To do so, we need to remind everyone about basic requirements, lessons learned and ways forward to meet the fast-changing times.  CCOs have to maintain and then advance their positions. In my view, given the interdependence of all of the important issues mentioned above, the role of the CCO has become even more critical.

CCOs are the stewards of a corporation’s ethical culture.  I would argue that the ability of a company to meet the critical issues in the future requires a company to maintain a solid foundation that elevates the CCO to the proper role and responsibilities.  Organizations that make such a commitment and execute that set of requirements are in a much better position to address critical issues than organizations that view CCOs as a tag-along function or yesterday’s news. 

You can always tell where an organization stands by the importance it places on ethics and compliance.  If the CCO is buried within the organizational chart, you know that ethics and compliance are mere words and not much more.  On the other hand, when you observe a robust ethics and compliance function with adequate resources, you will find that the organization is probably addressing significant issues and attempting to face future challenges with a robust commitment. 

Unlike many other issues and risks, ethics and compliance does not succeed nor exist in just a silo or in its own world.  By definition, the success of an ethics and compliance program, and even the organization itself, occurs when important challenges are embedded in every corner of a corporation organization in accordance with a specific commitment by each function. It is easy to spot those organizations that have this structure and those that do not.

We all know how important the ethics and compliance function is to the ultimate success of a business.  Companies that properly attend to their culture inevitably gain advantages in the marketplace through productivity, commitment and competitive excellence.  One goes hand-in-hand with the other — a robust ethics and compliance function reflects a leadership team and employees that are performing at close to optimal levels.  Employee morale and productivity are high in corporate organizations that commit to embedding, promoting and monitoring its corporate culture of ethics and compliance.

While these points have become fairly understood and often communicated, the real test for any company is not the ability to state these principles clearly but to commit to ethical principles in practice.  This commitment cannot waiver in the face of countervailing “business” considerations, i.e. viewing ethics and compliance as a direct tradeoff between profitability and compliance.  To the contrary, those organizations and leaders that understand that the commitment to ethics and compliance has a direct impact on an organization’s financial sustainability.


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