The CCO’s Challenge: Becoming a Strategic Business Partner
Chief Compliance Officers are on their way to achieving their dream. All of the trends are looking up – compliance influence is up, and budgets and resources are growing.
CCOs want to be part of the C-Suite. According to the last PWC Compliance Survey, only 29 percent of CCOs have made it into the C-Suite but that will increase. Only 27 percent of CCOs continue to report to the general counsel while 34 percent report directly to the CEO.
CCOs are about to reach the mountaintop and the question arises – what will CCOs do when they have the influence and the resources they wanted.
One thing for sure is that CCOs will have to stop reporting on number of training programs, numbers of certifications and most importantly, the number of complaints. If a CCO walks into a senior management meeting or a Board meeting with colorful charts of complaint profiles and bar charts of number of employees who have participated in training programs, the CCO is not doing their job. They have to refocus and hopefully they will wake up.
CCOs have to make themselves indispensable. Or to put it another way, they have to add value to the company. The message behind compliance is much more than avoiding code or legal violations.
CCOs have to face the biggest challenge they have ever faced – they have to become part of the business functions and earn a seat at the company’s strategic planning meetings. To do this, CCOs have to listen and understand to the business units. They have to learn how the business operates and what they can do to help.
After learning about the business unit needs and strategic plans, CCOs need to develop a value add to the business. It is one thing to go into business meetings and point out potential compliance risks and issues that have to be developed. It is another for the CCO to come up with ideas to use compliance processes for business purposes, to provide business units important internal information about operations, and to develop programs that a business unit can use to increase productivity and eventually revenues.
Let’s start with some obvious examples. Remember, CCOs sit atop the organization and have a macro-view of corporate operations. From this perspective, they can quickly gather information and intelligence that may be helpful to business units.
First, CCOs have access to information that may assist the business unit. CCOs should know the number of third parties used in a particular region or by a specific business unit. The information should be kept up to date. Business units rarely keep that information current, and CCOs can help the business function in determining whether internal growth or use of outside third parties may be the more efficient way to expand the business operations.
Second, CCOs need to take advantage of their contacts with business development and sales staff around the world. They need to listen to them about their jobs, their challenges and specific intelligence they have about competitors and market conditions in specific regions and countries. This information is collected during training sessions and other direct interactions, and is important to assessing risk and, importantly, to strategic planning.
Third, CCOs directly participate in all acquisitions or sales of business operations. From the merger and acquisition or joint venture perspective, they can identify trends in integration, procedures that have worked and ultimately how the integration process has developed in specific countries and regions. This operational intelligence can be important to business unit leaders as they consider internal growth or aggressive acquisition strategies.