Compliance with a Purpose


missionChief compliance officers are under intense pressure.  They are being watched inside every company to make sure they deliver on their “compliance” program, and outside observers are ready to comment on any misstep or breakdown in corporate compliance.

It is a wonder that CCOs can get their job done.  They are pulled in a million directions, given inadequate resources, and held accountable for an unrealistic level of performance.  CCOs have to be careful not to overreact to this pressure.  They have to keep focus on what their job is and how they can best accomplish their purposes.

In this environment, CCOs have to avoid easy but meaningful measures of performance.  Instead, they need to establish relevant measures of their compliance program.

Sometimes it is easy to just measure what is easy to collect.  My favorite example of “easy” metrics is the number of complaints received on a hotline.  The number of complaints can be argued to reflect contradictory trends – a lot of complaints means employees believe in the speak up culture and hotline system, so therefore, the program is a success.  Conversely, a CCO could argue that an increase in the number of calls coming in on the hotline means that employees are unhappy and the culture is deteriorating.

effective6Similarly, CCOs may point to the number of employees being trained or the number of training programs conducted to reflect a success in a compliance program.  Of course, there is an obvious point to training  but the number of training programs attended by an employee does not really measure whether the employee understood the program, integrated it into his or her activities, and then adhered to the standards outlined in the training program.

CCOs have to look for and develop meaningful measures of their compliance program.  Once designed, they have to use these measures to inform their compliance program – whether it is to develop new policies, new approaches or refinements to their compliance program.

We all look for easy answers to complex problems.  Unfortunately, the world of compliance does not operate so easily.  Measures are hard to find and difficult to justify.  Relevance is a tough standard when looking at a compliance program.

In the face of overwhelming responsibilities, CCOs have to prioritize what they do and how they spend their resources.  Accurate measurements of a corporate compliance program help CCOs to allocate their limited resources most efficiently.

leveraging2CCOs have to solve this problem early in the design and implementation of a compliance program.  They need to focus on the culture of the company as the most reliable indicator of a compliance program.

A company that has a culture of ethics is in the best position to avoid serious legal and compliance risks.  CCOs know that and have to focus on that issue.  Once they do, the measurement of their compliance program will be tied to program improvements and refinements.


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 Law Group | Attorney Advertising

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