CCOs’ Destiny of Success or Failure
It is important to understand one’s limitations in life. In the world of compliance, CCOs need to be realistic when they start a new job with a new company. It also means that a CCO has to be honest with himself or herself.
Every person knows deep down their strengths and weaknesses. CCOs know this as well. Some CCOs (and people) have a “can do” attitude; some have a “don’t rock the boat” mentality; and some have a mix of the two.
When starting a new job a CCO brings this attitude and set of skills to the table. The company has its own culture and set of expectations, most of which comes from the governance model from the board and the tone set by the CEO.
CEOs fall into different categories as well. Some are invested in a culture of compliance and ethics; some just mouth the words because they know they have to do so; and some ignore the issue altogether.
In simplistic terms, the CCOs success or failure at the job depends on the meeting of the minds between the CCOs talents and capabilities and the company’s tone and expectations. If they are consistent, that will be the inevitable result.
For example, if the CCO is a person who wants to keep things as they are – in other words, does not want to rock the boat, and the corporate culture and CEO tone is to mouth the words of compliance and ethics without a real commitment, the company will end up with nothing more than a paper compliance program. As a result, the likelihood of a violation is higher, and the consequences if there is an enforcement action will be more severe.
On the other hand, if the CCO is a person who is committed to change, and the corporate culture is supportive of such actions, the company is likely to improve its compliance and ethics program and financial performance, reduce the risk of a violation and protect themselves against serious consequences from a government enforcement action.
Not all CCOs fall into the activist model of commitment to change. Just like any profession, some CCOs are there to avoid risk, manage the existing compliance program, and make marginal changes to the existing compliance program. These CCOs tend to “succeed” in those companies where compliance and ethics are not at the top of the agenda but viewed more as a requirement but not a priority.
It is interesting to watch the transformation in the CCO industry. For many years, CCOs were not recognized as a valuable asset to the company’s overall performance. CCOs were an untapped and unappreciated resource. As it turns out, more companies are starting to recognize the value of a CCO, not just in maintaining a compliance and ethics program, but as a significant resource to the overall financial success of the company.
This is the most significant trend occurring in the compliance industry. CCOs share a macro-view of the company with other senior C-Suite executives. In addition, the CCO can be proficient at designing and implementing systems to monitor and measure various corporate activities. This is a skill set which can be applied to other functions in the company.
A smart CCO is worth ten times their salaries if they are properly utilized in management. It will be interesting to watch as this phenomena continues and the talented CCOs start to rise to the top of senior management.