A CCO’s Challenge: How to Convince a CEO to Embrace Compliance

A Chief Compliance Officer faces many challenges in designing and implementing an effective ethics and compliance program. If a CCO conducts appropriate due diligence before joining the company, he will know the challenges he is facing.

All too often, I hear of CCOs who join a company based on numerous promises and representations by the CEO, the board and senior managers about the importance of compliance, the resources available to the CCO, and the support the CCO will receive to accomplish his/her objectives. Later, when these promises turn out to be hollow, the CCO may continue or leave the company out of frustration.

A CCO cannot just decide to leave a company out of frustration without trying to fix the situation. Most CCOs experience serious frustrations during their tenure at a company. No one has an ideal situation. CCOs inevitably run up against uncooperative interests in a company.

A most significant recurring problem occurs when a company CEO claims to support ethics and compliance but fails to live up to his/her promises. CEOs are good at persuading people and they often make promises to CCOs that they do not keep. CCOs can either deal with the issues or turn away from any conflict and leave the company.

CCOs should not give up so easily. In fact, CCOs need to devote time and attention to convince or convert the CEO to embrace the value of ethics and compliance.

To accomplish this conversion, CCOs have to line up support for the ethics and compliance program by enlisting the support of existing stakeholders. In this respect, the CCO should enlist the other senior executives, including business division heads, the chief legal officer, the internal auditor, human resources, and other constituent leaders.   Hopefully, the CCO is the Chair of a Compliance Committee consisting of these senior leaders and others.

The Compliance Committee is an important organization that can inform and bring informal pressure on the CEO to embrace the compliance message. The interaction between the CEO and the Compliance Committee has to be handled delicately so that the CEO does not feel defensive or pressured.

A CCO has to organize a consistent message from the Compliance Committee to the CEO (and other senior leaders) that need convincing as to the merits of compliance and the need for increased investment. The importance of this task should not be underestimated. The CCO needs to communicate and inform the CEO through the Compliance Committee.

The message of compliance should be the value of compliance as an intangible asset to be leveraged in the competitive market, and improve overall employee performance and job satisfaction. A CEO has to be educated on the value of compliance itself as an intangible asset. CCOs have to educate CEOs in this area, communicate a consistent message, and enlist as many allies in the effort.

If a CEO still does not understand the message, the CCO has to redouble his/her efforts to bring the board members to the mission. If there are any board members who understand the importance of compliance, they should be enlisted as well to persuade the CEO. In combination with the Compliance Committee, the board members can leverage their influence to persuade the CEO to embrace ethics and compliance as an important corporate goal.

CCOs have to use every creative approach they can develop to seek to influence the CEO. Without the support of the CEO, a CCO is fighting an uphill battle; with the support of the CEO, a CCO has the potential to design and implement an effective ethics and compliance program – a goal worthy of a significant effort.

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