Regulators are increasingly making one thing clear: Having a strong, independent compliance function is not optional if companies want to avoid expensive enforcement actions. But, as Elizabeth Long of legal recruiting firm Major, Lindsey & Africa, simply knowing what regulations apply is just the first step.
Now more than ever, having a strong chief compliance officer (CCO) at the helm is important because of the increasing complexity of state and federal regulations governing how companies do business and “bet the company” investigations.
Knowing the regulations and how to create policies and procedures to comply with them, however, are table stakes for any CCO. An effective CCO must have much more than these substantive skills. A strong CCO will have stellar interpersonal skills with the ability to lead by influence and partner with the business to get buy-in for compliance to create and effectively implement a pragmatic, business-friendly compliance program that is scaled/scoped to the business. But how does one determine whether a candidate has the interpersonal skills to truly effect positive change?
Your current state of compliance
The level of influence a CCO will need to assert will depend on the maturity of the organization’s compliance program. If you already have a developed and well-functioning program, you will want to consider their ability to assess the program, identify areas for improvement and develop relationships at all levels in order to successfully implement changes and keep the program running smoothly. This is much more straightforward than if the company is in the process of developing its compliance program. Then it will be looking for specific experience with change management.
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Read moreDetailsWhat leading by influence means
Whether creating or improving the compliance program, a CCO will need the emotional intelligence and agility to effectively communicate to all employees why these new processes and procedures should be complied with and why the old way of doing things is no longer sufficient. This is a subtle and nuanced skill, as the CCO does not have direct supervisory control over all employees and cannot decree compliance. Rather, they will need to lead by influence, developing strong and trusted relationships with employees at all levels of the company in order to make the business case for compliance.
An experienced CCO will be able to identify the policies and procedures that fit the business as opposed to forcing off-the-shelf or outdated policies developed for a different era. Deborah Penza, senior vice president and CCO of Syneos, said, “It is important to select a chief compliance officer who can serve as a strategic partner to help the business navigate a complex and evolving regulatory landscape. A chief compliance officer who understands the business, as well as its goals, challenges and opportunities can provide valuable insights and solutions that enhance the performance and reputation of the organization.”
The CCO will also have to prove that the compliance department is not the police or the Department of No but rather is a business partner who wants to help the business grow while mitigating risk and keeping the company and its employees out of trouble.
Samantha Yarbrough, CCO and vice president of labor and employment of American Water, said, “A successful CCO will be able to demonstrate to their stakeholders that the compliance program is a partner, not a police force, and that bringing questions, concerns and complicated situations to compliance will result in practical advice that reduces risk while furthering the company’s strategic objectives.”
But in order for the CCO to be successful and to make an impact, senior management must send the message throughout the organization that compliance is a necessary and valued part of doing business (and also the right thing to do) and failure to comply will have repercussions. If there isn’t buy-in from the top, then the CCO faces an uphill battle that may not be won, no matter how experienced or convincing they are. Boards and senior executives must show their support and backing for compliance in order to help move the program forward.
Assessing a candidate’s soft skills
Determining if a candidate has the necessary substantive compliance experience is the easy part of hiring; ask them about their knowledge of the applicable regulations and experience conducting investigations and putting in place and auditing policies, procedures and trainings. But evaluating interpersonal skills is much more nuanced. To assess a candidate’s ability to lead by influence and be a strong business partner, try asking for specific experiences that shed light on how they work and interact with others:
- Tell me about a time when you had to lead by influence and work cross functionally to implement a policy or procedure.
- Tell me about the steps you would take to scale a compliance program to fit the business.
- How do you approach developing new relationships with the business?
- What would your priorities be in your first 30 to 90 days?
- Tell me about a time when you had to bring a naysayer on board with compliance and how you went about doing so.
- How might a detractor describe you? Do you agree with this assessment?
- Tell me about an unpopular policy you needed to implement and how you went about doing so.
- Tell me about a time when you partnered with the business to find a different way to achieve a similar goal with less risk.
A strong CCO can implement a compliance program that can protect a company from costly, time-consuming and sometimes “bet the company” investigations, while at the same time, helping the business grow in a responsible way. In order to be successful, the CCO must have the ability to lead by influence, develop relationships and be a strong proactive business partner. Hiring a CCO who has the ability to do so is the first step on the road to compliance.
Elizabeth Long is a partner in the in-house counsel recruiting team at Major, Lindsey & Africa’s Philadelphia office. She specializes in the recruitment of general counsel, chief compliance officers and other senior attorneys for corporate legal departments as well as nonprofits and governmental agencies. She is also a member of the firm’s board services team, assisting organizations with building more diverse boards of directors.
