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Where is your CCO’s Office? An Important Question!

office3Contrary to what parents always tell their kids, when it comes to the authority of a Chief Compliance Officer, appearance is everything.

This may be another in the long line of profound grasps of the obvious, but if a Chief Compliance Officer is a member of the C-Suite, is seated in the same area as the C-Suite, and attends all important C-Suite meetings, then chances are the CCO has adequate authority and independence in the company.

Milton Waddams from the classic film, Office Space, is a sterling example of what I mean.  Throughout the movie, Milton’s desk was moved to lower and lower locations in the office building reflecting his own downward spiral.  There is a reason Milton’s character and experience resonated with viewers –we all could relate and we understood that Milton’s standing in the organization was reflected in his office location.

The same principle applies when it comes to CCOs.  Symbols are important, especially in internal corporate operations.  A CCO with a small office, far away from the C-Suite is unlikely to have the access and the influence needed to carry out his or her job.  On the other hand, a CCO who sits in the C-Suite, is treated as a member of the C-Suite, will likely have the access and influence needed to carry out his or her job.

An empowered CCO does not just mean a title.  It means a commitment from senior leadership to communicate that compliance is a priority and that compliance brings important financial benefits to business meetings.  Too often, senior managers may mouth their commitment to compliance but fail to take the steps needed to integrate compliance as an equal business partner into the C-Suite’s operations.office4

CCOs located in the C-Suite have to make sure it is not just an empty desk but a commitment from the CEO and senior managers to take the necessary steps to empower the CCO and provide adequate authority and resources.  CCOs who experience a reduction in authority or resources know they are on the Milton-track to nowhere and take steps to reverse the course in their companies.  It is a make or break time for a CCO — either the job will work or not work.

As a first step, CCOs should be wary of any situation where they are promised influence and access but not given the apparent authority and resources.  An empowered CCO has considerable influence in an organization.  Stakeholders are more likely to cooperate with the CCO in order to build an effective ethics and compliance program.

If the CCO is not given the proper support from the C-Suite, stakeholders will resist certain actions and commitments, in order to protect their own operations and turf.  It is office6unfortunate but you can always tell a lot about a company by its treatment of, and commitment to, the CCO.

The tests for an effective CCO are fairly straightforward –

1.  Is the CCO a member of the C-Suite?  If so, where is the CCO’s office?

2. Does the CCO participate in all important senior executive management meetings?

3.  Does the CCO have adequate access to the CEO and other senior managers?

4.  Does the CCO have adequate resources to carry out his or her job?

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