CCOs Speak With Their Feet

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moveChief Compliance Officers act with integrity.  When it comes to their work, they know when an organization is committed to compliance.  They also know when ethics and compliance is “window dressing.”

The recent announcement that JP Morgan’s CCO is leaving after one year is a very telling development.  When the CCO picks up and leaves, it usually reflects one thing – the organization is not committed to ethics and compliance and the CCO does not have a seat at the table.

CCOs are more discriminating these days – and rightfully so.  They know when an organization is committed to compliance and they know when they are being “used.”  It does not take long.

CCOs are being “seduced” by corporate leadership.  They have to be careful about what they are promised, the nature of their responsibilities and whether or not they are going to be empowered.  Corporations are offering huge salaries to top CCOs.

All of that is well and good, but in the end CCOs have to make sure they have the authority and independence to do their job.  When a CCO leaves after one year, it usually means they did not get what they were promised.  I don’t mean in salary or benefits; I mean in the authority and tools they were promised.move2

CCOs speak when they leave – not verbally, but with their feet.  If you watch personnel moves in the compliance industry you will quickly learn if a company is committed to compliance.

Before taking a position at a company at a high salary with lucrative benefits, a CCO has to review the facts carefully.  Senior executives will answer every question with “happy talk,” meaning they will reassure the CCO about his/her authority, resources and responsibilities.  Senior executives promise the moon but rarely deliver.

CCOs need to come up with their own ist of requirements.  Please do not put down “tone at the top.”  Start with other more important issues.

Is the CCO a member of the C-Suite?  (If not, move on)

How often does the CEO meet with the CCO?

Does the CCO have a regular meeting with the Board Committee, including a private session?

What is the relationship between the Board Committee Chair and the CCO?

What resources does the CCO have?  (Do not rely on empty promises of plans to grow)

Where is the CCO’s office?  (This should be negotiated)

move5Does the CCO attend (as a member) regular senior executive management meetings?

How does the company ensure ethics and compliance throughout the organization?

As the CCO profession “matures,” CCOs need to elevate their selection process and find companies where compliance is more than just window dressing.  CCOs need to use their feet to find the right fit.

Topics:  CEOs, Chief Compliance Officers, Corporate Counsel, Corporate Governance

Published In: Antitrust & Trade Regulation Updates, Business Organization Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Group Law Firm | Attorney Advertising

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