Successful Compliance Officers – A Balancing Act
Compliance officers have a difficult job.
So why are so many people interested in joining the profession?
At bottom, compliance professionals are inspirational professionals and inspired by their mission. Compliance officers have a mission – to embed and promote a culture of ethics and compliance.
When you boil it down, every compliance officer is dedicated to two specific missions: to embed and protect its culture, and to ensure compliance with compliance controls.
The difficult part of the job is achieving these two objectives. Each is reinforcing of the other.
A successful compliance officer recognizes the importance of promoting, measuring and monitoring the company’s culture and that such an objective is not satisfied by sporadic communications or CEO videos touting the company’s values and commitment to principles. Similarly, a CCO that is obsessively focused on rules compliance, to the detriment of a balanced view (predicated on cost-benefit analysis), will undermine a company’s compliance program.
The key here, like everything else in life, is maintaining balance between these two important objectives – promoting your company’s culture and ensuring an effective system of compliance controls.
If a compliance officer focuses on one of these objectives to the detriment of the other, the compliance officer will not succeed. A balanced approach requires careful calibration of design and enforcement.
I am not suggesting in any way that either of the two goals is less important than the other. I have observed compliance programs that reflect a disproportionate focus on either culture versus rules, and vice versa.
A good test for a compliance program is to examine how much time and effort is spent on specific tasks and objectives. A compliance program that devotes a significant amount of time to gifts, meals and entertainment is probably out of balance. On the other hand, I have observed compliance programs dedicated to promoting culture and the communications needed to support such an effort to the exclusion of compliance with third-party risk management. In fact, the company assigned all third-party risk management responsibilities to a single compliance officer who was buried in paper, worried about third-party risks, and frustrated by an inability to devote adequate attention to the issue.
It is a delicate balance between compliance controls and promoting a culture. A compliance officer can quickly develop a reputation as an “enforcer” or a “sheriff” if they are singularly focused on design and compliance with policies and procedures. Such a perception is a dangerous precursor to a compliance program that employees avoid and circumvent.
A compliance officer has to recognize that part of the mission is to inspire, to communicate the company’s values, and to demonstrate such a commitment in their words and their conduct. Of course, corporate leadership has to do the same, and most importantly, show company employees how to conduct themselves as inspired corporate citizens.
In the end, compliance is a balancing act between two mutually reinforcing objectives. Compliance officers have to operate with these two objectives in mind, guide corporate leaders to reinforce these objectives, and coordinate with important stakeholders needed to promote a company’s culture and its compliance with its rules.