The CCO as a strategic partner

At the heart of a successful compliance program lies the CCO’s ability to integrate seamlessly into an organization’s fabric. As strategic partners, CCOs work closely with various departments to ensure compliance is not seen merely as a series of checks and balances but as a value-add that enhances operational efficiency and reputation. They achieve this by engaging in open dialogues with department heads and employees, educating them about the implications of noncompliance, and demonstrating how compliance measures align with the broader business objectives.

CCOs are in a unique position with a need to understand every facet of the organization. To be able to support and assess risk within the various functions, they must understand the operations—and the regulations and standards governing those operations.

For instance, in the realm of financial services, a CCO might collaborate with the finance and marketing teams to ensure that new product offerings comply with regulatory standards while still meeting market demands. This involves not only a deep understanding of the legal landscape but also an ability to communicate these requirements in an actionable way that is integrated into business strategies.

By fostering a culture of compliance, CCOs help avert potential conflicts and ensure that compliance becomes a shared responsibility across the organization.

Proactive engagement and education

One of the primary roles of a CCO as a partner is to proactively engage with all levels of the organization and educate and train employees on compliance issues. This ongoing education is vital in equipping the workforce with the knowledge and tools they need to recognize and address compliance-related challenges as they arise. Regular training sessions, workshops, and seminars can demystify the complexities of compliance and embed best practices within the day-to-day operations of the company.

Moreover, CCOs often employ innovative approaches to make compliance more accessible. For example, gamification of compliance training can increase engagement and retention of information. Interactive compliance portals where employees can pose questions or report concerns anonymously encourage a proactive approach to compliance. I personally find just being available to all levels within the organization to be valuable. Even in an organization with seven different business lines and over 700 employees, I make myself available, and I receive daily questions and confirmations from all different positions. This generates a culture that embraces compliance, and I recognize that while this interaction is involved, it ultimately saves me time through the creation of compliance champions. These strategies not only enhance understanding but also build trust between the CCO and other employees, reinforcing the CCO’s role as a supportive partner rather than a policing force.

When employees know they can come to compliance or when compliance comes to them, they can be honest and receive a supportive and coaching response rather than trying to hide concerns, which results in more work and resources from the organization.

Transitioning to an adversary

Despite the emphasis on partnership, there are situations where CCOs must pivot to an adversarial role to uphold the integrity of the organization. This shift often occurs when there are clear violations of compliance that put the organization at risk and when collaborative measures are exhausted or ignored. This adversarial stance is not about being oppositional but about protecting the organization and its stakeholders from legal risks, financial penalties, and reputational damage.

For instance, if an internal audit uncovers that certain departments are circumventing compliance protocols, the CCO must act decisively, investigating the breach and implementing corrective measures. This might involve working with legal teams to address potential liabilities and ensuring that similar breaches are prevented in the future.

If the CCO has the support of their colleagues, this perceived adversarial role can be mitigated; however, when CCOs do not have C-suite backing, their roles as enforcers can become complicated. They might encounter resistance to changes that are necessary for compliance or find that their warnings about potential legal risks are downplayed or ignored. This lack of support not only makes it difficult to implement effective compliance programs but also jeopardies creating a culture where compliance is not taken seriously, increasing the organization’s vulnerability to legal and reputational risks.

The situation is exacerbated when executives prioritize short-term gains or aggressive growth strategies that may skirt regulatory boundaries. In such environments, the CCO must often make tough decisions, such as whistleblowing or pushing back against high-level decisions, which can lead to tension and conflict within the leadership team.

The role of the CCO as an adversary is a testament to the importance and difficulty of the position within any organization. It requires not just a deep understanding of compliance issues but also a strong moral backbone and strategic acumen to navigate internal politics effectively.

Balancing the dual roles

Balancing these dual roles requires a high degree of emotional intelligence and professional integrity. CCOs must navigate internal politics and manage relationships while remaining impartial and committed to the organization’s ethical standards. Transparency in their operations and decisions, clear communication about the significance of compliance, and a consistent approach to enforcement can help maintain their credibility and authority within the organization.

Moreover, CCOs must be adept at risk assessment, constantly evaluating the potential impacts of noncompliance and adjusting their strategies accordingly. This dynamic approach ensures compliance measures are both preventive and responsive, adapting to new challenges as they arise.

One of the foundational steps in balancing these roles involves the CCO’s ability to clearly articulate the value of compliance to the organization. This involves translating compliance requirements into business benefits such as risk mitigation, reputation management, and long-term sustainability. By doing so, the CCO can help other C-suite members and employees see compliance not just as a legal obligation but a strategic asset.

For instance, in healthcare where compliance is particularly stringent, a CCO can demonstrate how robust compliance measures can be a competitive advantage, enhancing trust with clients and regulators alike. This approach fosters a positive perception of the compliance function as a partner to the business rather than an obstacle.

Another must is ensuring consistency and fairness in compliance dealings. The criteria for enforcement should be clear and applied uniformly across the organization—regardless of position or status. This fairness helps maintain respect and authority when the CCO must enforce compliance, as stakeholders know that these measures are not personal but standard procedure.

When stepping into an adversarial role, the CCO should ensure all actions are well-documented and transparently communicated. This not only upholds the integrity of the compliance process but also protects the organization and CCO in the event of disputes or external audits.

Conclusion

Every CCO is going to find themselves in a situation where they have to be steadfast in their resolve for compliance and ethics. The dual role of CCOs as both partners and adversaries within the workplace is essential for fostering an organizational culture that values compliance:

• As partners, they build collaborative relationships, educate, and integrate compliance into business strategies.

• As adversaries, they uphold the law and organizational standards, stepping in decisively when necessary.

By effectively managing these roles, CCOs not only protect their organizations from risks but also contribute to sustainable business practices that can drive long-term success. Their ability to adapt and respond to the evolving compliance landscape is critical in navigating the complexities of modern corporate governance.

Takeaways

• Chief compliance officers (CCOs) must navigate dual responsibilities in being a partner and an enforcer.

• With support from the C-suite, the adversarial responsibilities are easier to manage.

• Proactive engagement can lead to less risk and additional support for a compliant culture.

• CCOs must have strong moral backbones and strategic acumen to navigate internal politics effectively.

• CCOs are in a unique position with a need to understand every facet of the organization.