As the head of compliance at your organisation, you will be assuming one of the most critical positions on the management team. Yes, the chief compliance officer (CCO) oversees everything to do with compliance within a company – from laws and regulatory requirements, to the necessary and applicable policies and procedures.
Reporting directly, as you will, to the chief executive officer (CEO), you will be in charge of keeping both the head of your firm and the board of directors informed, and assured, about the way in which compliance-related policies and procedures are being: 1) understood, 2) respected, and 3) complied with across all individuals, teams and departments.
It will also be vital to unpack and tackle – at this senior level – any challenges your company faces within the compliance space.
This will entail having a thorough academic and practical background in establishing standards, and implementing procedures to keep compliance levels as high as possible. You will also need to identify, prevent, and detect any forms of non-compliance that you are party to, so that these can be corrected to the best of your ability making use of the applicable laws and regulations of your region.
Corporate Compliance – defined
The experts at TrainingIndustry.com, who serve as a resource for learning professionals seeking information about best practice, advise that to remain compliant, a firm must “adhere to industry and organisational standards and/or policies”.
To be clear, there is a set of expectations – both internal and external – that employers put in place for their employees. From an external perspective, a business has simply to follow the law of the land in which they are based, and/or territories in which they trade. From an internal perspective, however, each business is able to design and implement its own compliance structure, to ensure a certain standard of behavior is adhered to at all times, and that illegal or unethical conduct is reported.
By helping your organisation to remain above board in all of its many initiatives, the rather extreme expenses of litigation and fines, such as those that result from tax evasion and fraud, can be avoided at all costs.
Compliance Risk Under the Spotlight
According to TechTarget, a US company that offers data-driven marketing services to business-to-business technology vendors, there are five common types of compliance risk:
- corrupt and illegal practices, which may range from fraud, theft and bribery, to money laundering and embezzlement;
- damaging environmental activities, including destruction to natural habitats and ecosystems, use of harmful chemicals, hazardous waste disposal, and the pollution of pristine groundwater;
- violation of privacy laws, by not putting the necessary steps in place to protect sensitive data from the likes of hackers, viruses and the purveyors of malware;
- omitting to follow workplace health and safety protocols, as enforced by occupational and food and drug authorities; and
- process risks, where the established procedure is not followed when tackling a workplace task.
Once hired as the CCO, your work will be cut out for you in “identifying, assessing and mitigating potential losses that may arise from [your] organisation’s non-compliance with laws, regulations, standards, and both internal and external policies and procedures”.
Remember that tracking changes in your working environment, as these pertain to compliance-risk management, must be carried out on an ongoing basis; and alterations may also be needed when new policies, directives and regulations are made externally to the law, or need to be implemented internally for whatever reason.
Because senior staff members across many departments have a role to play in your work, it will assist you greatly to be on good terms with the individuals heading up the legal (chef legal officer, or CLO), financial (chief financial officer, or CFO) and IT (chief information officer, or CIO; chief technology officer, or CTO) teams.
Key Duties and Responsibilities of a CCO
At MasterClass, a platform to facilitate learning from the industry’s top executives, the following four activities will form a regular part of your daily work:
- reviewing new information from regulatory bodies, so that you can draw up or revise company plans to manage its compliance;
- carrying out compliance-related training across all company departments, in partnership with the heads of legal and HR;
- identifying problems or challenges related to company compliance requirements, and developing solutions in discussion with other C-suite executives; and
- keeping tabs on any negative business results related to new or revised compliance plans, so that this can be communicated to the relevant authorities.
Your Qualifications and Experience
Begin your journey to the CCO’s corner suite by gaining a bachelor’s degree, potentially in finance or accounting.
Next, acquire as much on-the-job professional experience as you possibly can – say in an entry-level compliance position (compliance analyst or junior compliance specialist are perfect options for you). Here, you will hone the skills necessary to work your way up the compliance career chain, and will also familiarise yourself with the kind of work that lies ahead.
A postgraduate degree – such as an MBA with a compliance focus – is a cunning next step; it will impress potential employers, and show them the extent to which you are up to speed on the latest industry knowledge. Then, before applying for your CCO position of choice, be sure to spend some time honing your managerial skills, and reveal the experts at job site Indeed.
A CCO who is also an astute manager, or who boasts well-developed leadership skills, will be able to communicate complicated compliance-related tasks in simple language; and will likely have the ability to get all company departments working swiftly and strategically towards an optimum end goal: a trustworthy and ethical business environment.
Recent Compliance Scandals in the South African News
Once you’ve assumed your much-longed-for role of CCO, just one aspect of your daily work regime will involve keeping abreast of all the business scandals being reported on in your favourite online newsreel.
During 2022 alone, there were:
- Tongaat Hulett’s accounting scandal, SA’s second largest after Steinhoff – which contributed to a 95 percent fall in the company’s share price;
- Spar’s fraud charges – which were laid against senior executives by the franchise’s operators, the Giannacopoulos Group, as a result of false allegations that the grocer was owed money and could therefore gain control over certain branches; and
- the liquidation of Constantia Insurance Company Ltd, in the September of that year – after the company, which the Reserve Bank had apparently had its eye on for years, was liquidated by order of the Gauteng High Court due to breach of its capital requirements.
3 Traits to Help you Thrive in the Role
Because of how rife the incidence is, globally, of high-profile ethics violations and corporate misdeeds, the CCO of any firm must follow the behaviour of people in high-risk jobs and also provide the training they need to avoid falling foul of compliance regulations – and the law.
Here are three personality traits that in-house legal and compliance trainers BarkerGilmore believe will make the challenge so much easier for you, and which you could also work on in executive coaching if you feel they are lacking:
• the way you lead
You’ll need the clout to champion the cause of any investment that’s needed, at your company, into regulatory matters. It will help to be respected by your peers in the C-Suite for your comprehensive knowledge of the regulatory environment; but also to be able to put your ego aside and listen carefully to the goals of other executives, and how you can assist them in reaching these.
• your balanced approach to a business dilemma
Your work will go so much more smoothly if you are able to come up with creative solutions to regulatory issues. This means establishing a clear and comprehensive view of where your company is headed, and challenging external regulators when they make unfair or ill-conceived demands.
• soft skills, and then some
This is a position, like many in the C-suite, where you’ll need to deal with a wide range of different constituents – using appropriate language and content in each particular case. From assuring the public of your ethical approach to doing business (typically communicated via the marketing and/or PR departments), to explaining the importance of consumer rights and sustainability to junior staff members, the variety of the CCO job will keep you on your toes. Generally, if you are able to show everyone involved how certain policies and procedures will make your operations more efficient, profitable and transparent, these same policies and procedures will have a more thorough uptake.
Fast Fact 1: An Average Earning Comparison (SA versus the US)
According to SalaryExpert.com, the average gross CCO salary in SA is R1 576 877 per annum, excluding an average bonus of R253 089. Source: https://www.salaryexpert.com/
In the US, however, the average salary for a CCO is a whopping US$238 301 [R4 413 740], as of 27 February 2023 – but the potential range differs quite a bit depending on the individual’s education, certifications, additional skills, and the number of years they have spent in the profession. Source: https://www.salary.com/
Fast Fact 2: CCO Leaves Ericsson Under a Cloud
One of the first compliance incidences to reach international headlines in early 2023, relates to world-leading information and communication technology company Ericsson, which is headquartered in Stockholm, Sweden.
Chief compliance officer Laurie Waddy is leaving her position after four years in the job, at a time when the Swedish 5G equipment maker has had various scandals and governance breaches lain at its feet.
According to Bloomberg, Waddy’s role has been central in helping the company “work to straighten its corruption track record, clean up its corporate culture, and manage … alleged violations of the US Foreign Corrupt Practices Act”.
The company is also under investigation over payments in Iraq that may have been made to the terror organisation, ISIS – which saw more than 10 percent of shareholders voting against shielding CEO Borje Ekholm and his board from potential liability.
After making an arrangement with the US Department of Justice and the Securities and Exchange Commission, Ericsson will remain under the oversight of an independent compliance officer until around the middle of 2024.
Fast Fact 3: How Compliance and Legal can – and should – Form a Solid Team
Many people are unsure of how the legal function in a company (typically handled by the chief legal officer, when written] or external legal counsel), differs from that of compliance (typically handled by you, in the role of CCO).
According to Strategic Management, a compliance specialist in the healthcare industry, the CLO or legal counsel are generally called upon to handle a potential violation of law or regulation; they also generally take the lead when a regulatory or legal issue arises with another party.
To clarify, and for the easy delineation of the legal from the compliance departments (and relevant contractors) of your firm:
- legal handles contract drafting, negotiation and review; while
- compliance takes care of violations related to the company Code of Conduct, together with other policies and procedures that staff members at all levels should follow – and any wrongdoing by an employee or contractor while carrying out their duties for the firm.
Working together strategically, and picking each other’s brains or checking in for advice on a regular basis, is a brilliant way for the two departments to support each other.
Fast Fact 4: Five Books to Browse Through
- Chesnut, R. (2020). Intentional Integrity: How Smart Companies Can Lead An Ethical Revolution (US: St Martin’s Press)
- Bullough, O. (2018). Moneyland: Why Thieves And Crooks Now Rule The World And How To Take It Back. (US: St Martin’s Press)
- Ariely, D. (2013). The Honest Truth About Dishonesty: How We Lie To Everyone
- (US: Harper Perennial)
- Wright, T.. & Hope, B (2018). Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood and the World (US: Hachette Publishers)
- Bodanis, D. (2020). The Art Of Fairness: The Power Of Decency In A World Turned Mean (UK: Little Brown)