Compliance Professionals And Data Analysis

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compliancecheckupsEveryone knows that a compliance officer does not need to be a lawyer.  Some compliance professionals believe that lawyers do not make very good compliance officers – the jury is out on that.  To me, what matters more is the personal attributes that a person brings to a job – are they positive, persistent, goal-directed, self-effacing, and able to communicate and work together with people.

Compliance is moving past the mumbo-jumbo world of platitudes to a more defined profession.  I have read too many articles, reports and studies which talk about “culture” and other amorphous concepts in vague generalities which have very little application to the real world.  I know that sounds pretty cynical but I am convinced that compliance and culture are going to be defined more by data and analysis than by platitudes and feel good statements.

You can always tell when dealing with a nascent compliance program.  The Chief Compliance Officer points to broad statements of support from the CEO and other senior managers reflecting the company’s commitment to ethics and compliance.  Those are great things but they are only a starting point.

The real work begins with a careful analysis of risk, allocation of compliance resources and monitoring of the compliance program.  Much of that depends on action and measurement of such actions.  In the end, data and analysis will be major drivers in a compliance program.data5

As a result, compliance professionals need to develop data and analytical skills.  Whether a compliance professional is a lawyer or not, the real test will be whether the compliance professional is comfortable developing models for measurement, and analytical skills for assessing the meaning of data.

Data should not be collected for data purposes.  Rather, data should only be collected to answer specific questions.  Those questions need to be prioritized in advance and then data should be gathered which is relevant to the question.

For example, the number of HR complaints collected on a hotline is an interesting number but a more specific question may be asked – where are the HR complaints coming from.  If the complaints are coming from a particular location, at a far greater rate than other locations in the company, which provides important information about the specific location where the number of employment complaints are high.  The data may be an important effectivecompliance2clue to an overall management problem.

The number of issues which can be measured are infinite and need to be prioritized based on resources and relevance.  Complaince professionals need to embrace this trend and get ready for the oncoming transformation of their profession – no longer will generalized, feel-good platitudes work – companies are going to demand data-driven compliance monitoring and measurement.

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Michael Volkov
The Volkov Group Law Firm

The Volkov Group Law Firm specializes in white collar defense, corporate compliance, internal... View Profile »


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