BY MICHAEL VOLKOV · JUNE 20, 2018
Congratulations on your new position as the chief compliance
officer. You successfully interviewed with the company, met the senior
executive team and the audit committee chair, and negotiated a nice
compensation package. You are feeling “pretty, pretty good” (ala Larry
David) about your new job and looking forward to starting your new position.
So, now, what do you do?
My first question for you is did you negotiate and secure
confirmation of important issues and mechanics necessary for you to carry out
your responsibilities?
Here is a laundry list of questions you should have resolved
before accepting the position.
§ To whom do you
report and how often?
§ Are you part of the
C-Suite?
§ What is your
reporting relationship to the board committee with oversight responsibility and
how often?
§ How committed is
the company to its ethics and compliance program?
§ How many staff
members do you have and where are they located?
§ What is your
budget?
§ Where is your
office located? (Hopefully not where Melvin in Office Space was eventually
moved)
Assuming all of the above-listed issues have been confirmed in
your favor and the company is truly committed to its ethics and compliance
program, you show up for your first day of work, plough through the human
resources portion of the day and process, and you are ready to go. What
do you do?
First, you meet with your compliance team. This is a
chance to meet your staff, learn about each of them, find out activities and
responsibilities. You can then begin to tentatively visualize and
prioritize assignments and responsibilities. Each of your staff members
will have strengths and weaknesses. Your priority is to assess the
capabilities, strengths and weaknesses of your compliance staff.
Second, you need to meet with your “operational” partners,
meaning your natural partners and supporters in the compliance space – human
resources, legal, internal audit, controller, chief financial officer, security
(if the company has an office), and information technology. In each
meeting, your task is to listen and learn and find out how exactly compliance has
been interacting with each function and the strengths and weaknesses of each
relationship.
If the company has an ethics and compliance committee, you need
to meet with each member, assess the operation of the committee and each
constituent.
What types of operations and programs has compliance established
to operationalize the ethics and compliance program?
Third, you need to meet with business leaders and key
managers. This is a critical task – to learn and understand as much as
possible about the company’s business.
§ How has the
business and compliance interacted?
§ How effective is
the working relationship?
§ What is the
business’ perception of compliance and vice versa?
This is an important opportunity to learn about the business,
how to develop a strong working relationship and to begin to lay the foundation
for a strong message of cooperation and support.
Fourth, you need to develop a tentative game plan. I mean
tentative from an operational stand point. You are still missing one key
ingredient – senior leadership and the audit committee. Before you meet
with them, however, you need to assess where the program is, what needs to be
done and a multi-year picture of where you envision leading the program.
A tentative view, which is developed based on objective evidence and your
expertise, is critical because you need to be ready to answer senior leadership
and audit committee questions on the state of the company’s compliance program
and where you want to take the program. As the leader of the compliance
program, you need to develop a vision for the program and the steps needed to
reach your objective(s).
Fifth and finally, you need to bring your vision to senior
leadership and the audit committee. This is a chance to test your
reality, to determine exactly whether the promises and representations made to
you prior to accepting the position are in fact true. In other words,
this is when you will gain insight into exactly how much you will be able to
accomplish, what roadblocks may develop at the senior level of the company, and
the challenges you will face.
At the conclusion of this process, a CCO will know whether he or
she will be facing an internal political struggle that will complicate his or
her assignment or whether the challenges can be overcome with the support of
senior leadership. Nothing is easy in compliance and no one ever thinks
the job will be easy, but CCOs can develop a quick sense of the path
towards success. For some, early in this process they will know that the
job may be extremely difficult or they will know that there is a path forward
but it will require commitment and hard work.
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