It’s only in the last 10 years or so that the role of “compliance practitioner” has become regarded as a professional role — one with a real career path. As the profession grows, so do the reach and the requirements of the Chief Ethics & Compliance Officer role. In addition to being part lawyer and part educator, compliance officers now are also required to become part psychologist, HR manager, PR professional and corporate strategist.
The three most important qualities of a CECO are courage, a deep understanding of his/her business and emotional intelligence. These qualities go beyond the traditional role of an in-house lawyer at most organizations. As a CECO, spending time with as many leaders of other functions as possible can help hone these skills and support their usage.
Having the courage to promote and foster a moral culture with the conviction that it will lead to higher company performance is a fundamental requirement for the CECO. The CECO is often the person who has to point out that, in the words of Peter Drucker, “leadership is more about doing the right thing” than just “doing things right.” In less evolved corporate cultures, in which speaking out can be perceived as posing real career risk, this can be incredibly difficult. Courage is key. And encouraging other leaders in the organization — whether in audit, human resources or operations — to speak out helps to build this capability in everyone.
Second, effective ethics & compliance program leaders need to truly understand the DNA of their companies, their operating and business levers and their long-term strategies and business challenges. Without such an understanding, they can’t be expected to enlist management from the very top through the middle of their organizations, nor to develop the marketing and communications strategies needed to ensure that their E&C messaging is credible, coherent and effective. The marketing team will have a keen sense of where the organization is going, as well as where it’s been.
While coming up organically through the organization gives leaders an advantage in this area, all leaders can learn more about their own corporate DNA through regular risk assessments. It is crucial that these assessments are not only frequent, but deep. The 2014 installment of LRN’s Program Effectiveness Report noted that the most effective programs use many more inputs in their risk assessments than less effective programs. Every organization faces different risks, and E&C risk assessments are more effective when they are closely tailored to the operation and realities of the organizations.
Finally, the ability to win over hearts and minds, to inspire, is critical. Ethics is fundamentally about right and wrong, about being on a mission to do the right thing. That isn’t something that can be accomplished through spreadsheets, negotiation or grudging acceptance. Rallying people around an idea and inspiring their moral imagination takes true connection and emotional leadership. It involves building trust between the CECO function and other groups.
An E&C leader who displays these attributes is well-equipped to have a meaningful impact on his/her company’s compliance programs. But it is how an individual manifests these characteristics that practically determines the effect on the company. Tone at the top is clearly a crucial element of E&C leadership. One of LRN’s research findings from our 2015 PEI Report is that active, consistent and sincere C-suite involvement in these matters makes it clear throughout the organization that behavior matters as much as outcomes — and that adherence to fundamental values and culture matters more to long-term organizational success than short-term metrics.
However, while tone at the top is essential, the only way to ensure that this message and example “go to work” is to reinforce it with strong tone in the middle. We cannot ignore the distance from which the tone at the top is received, as very few employees have regular interaction with members of their organization’s Boards and C-suite. That is why the most effective CECOs are relentless about driving the right “tone in the middle.”
Focusing on tone in the middle is a proxy for making sure the message gets through. One of the key findings from LRN’s How Report is that senior management often believes things at their organization are three times (or 300 percent) better, on average, than what the rest of the company’s employees think. Even if top management believes that their company is completely committed to emphasizing ethics, compliance and values, nothing will change if those messages aren’t being mirrored by middle management.
The reason why these middle managers are so important is that they are the tangible representation of “the company” to the majority of employees.
The message is clear: courage, a deep understanding of the business and emotional intelligence are all common attributes of strong E&C professionals. However, combining these attributes with the ability to successfully establish a firm tone at the top mirrored by the right tone in the middle further distinguishes the most impactful E&C leaders.
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Jean-Marc Levy is President, Ethics & Compliance Solutions for LRN, a leading provider of tools, education and strategic advice that help organizations navigate complex legal and regulatory environments and meet their compliance obligations.
Prior to joining LRN, Jean-Marc served as Senior Vice President and Head of Global Issuer Services for Intercontinental Exchange | NYSE and oversaw NYSE Governance Services, a provider of corporate governance, risk, and ethics and compliance tools and services, to boards of directors and governance and compliance professionals. He also oversaw NYSE’s corporate services business, a portfolio of value-added services for investor relations, IPO, and capital markets professionals.
Jean-Marc has served on several advisory and private company boards, has taught graduate level courses on M&A and Strategy, and is a judge in the Wharton School’s annual Business Plan Competition. Jean-Marc holds a B.S. in Computer Science from Tulane University and an M.B.A. from Wharton.