Is Your Chief Compliance Officer Lonely?
Compliance officers have a tough job. In most cases, they are overworked, under-resourced, and accountable for significant risks and issues. In the recent compliance vernacular, a CCO has to “operationalize” the company’s compliance program. That requires a CCO to go out and make friends inside the company.
CCOs have “natural” friends – legal, internal audit, human resources, and security – which share many common objectives and interests. If you are in a situation where even these relationships are difficult, you may be in trouble.
The CCO has to make friends with the C-Suite and the business. This is where the rubber meets the road. When it comes to C-Suite and business relationships, CCOs naturally seek to persuade the C-Suite and the business about the benefits of ethics and compliance. A CCO has to use positive language, referring to profitability, sustainability and competitiveness.
An effective ethics and compliance program contributes to the financial bottom line, improves productivity and morale, and promotes long-term stability. Additionally, CCOs are building business support by demonstrating the competitive benefits in the marketplace. Sales staffs look for competitive advantages, and an effective ethics and compliance program provides a significant edge. At bottom, a robust ethics and compliance program communicates a simple message – you can trust us! In other words, the company is a trustworthy business partner.
This rosy picture is fine for most situations. But what happens when a CCO cannot make the human connections needed to operationalize the company’s compliance program? What if the CCO is lacking in inter-personal skills?
To boil it down, is your CCO lonely? A CCO who sits in his/her office and interacts primarily with his/her compliance staff is ignoring critical relationships needed to build a compliance program. Some CCOs are not extroverts, but that is not a requirement for success. I have met plenty of effective CCOs who get the job done, persuade those that needed to be convinced, and are adept at building effective compliance controls.
A CCO who fails to interact with natural counterparts is doomed to suffer disappointments. Beyond his/her natural “friends,” the CCO has to devote time and attention to the important relationships – the board, the CEO, the C-Suite and business leaders.
A CCO who is called the “sheriff” by senior executives and managers should not be proud. Certainly, a CCO is responsible for enforcing the company’s code of conduct, but the CCO’s primary message has to be that he/she is a problem solver. In other words, the CCO can help business personnel accomplish their goals while ensuring compliance.
Believe it or not, business employees do not want to violate the code of conduct or the law. When a CCO explains the requirements to the business person and demonstrates that compliance is not intended to handicap the company’s business operations, the CCO has a chance to build a positive working relationship. Whether you characterize it as a win-win, business employees and compliance can work together for the common good, so long as the CCO takes the time to explain and listen to the needs of the business.
When a CCO speaks or acts like a sheriff, there is little to no possibility that the CCO and the business will work together. When they are at odds is when risks increase and the company could suffer real harm.
CCOs have to reach out from their offices and build effective relationships with key players in a company. They have to avoid loneliness and they have to pick and choose effective strategies to persuade corporate actors to join the cause – ethical business practices are successful business practices.