Ensuring Compliance Success: Building A Relationship With The Board


RelationshipWhen you get older, you realize that the so-called “mysteries of life” or institutions which you viewed with admiration from afar are really not as complex as you think.  I would never call this cynicism.  With age you recognize that a lot of things that occur in life are the result of nothing more than just good old fashioned people skills.

How does this apply to the Chief Compliance Officer’s work and position?  In most forward-thinking organizations, the CCO reports to the CEO on day-to-day issues and the Board on a quarterly basis and, as needed, if an emergency occurs.

In every company, the CCO needs to build a strong relationship with the Board, especially the chair of the committee which I responsible for overseeing the compliance function.  That means that the CCO cannot just submit written reports to the Board and stand back and hope that the Board or its Committee will come to the CCOs rescue when needed.

In the alternative, the CCO needs to do what the CCO does best – get out of the office and go and meet with the Board committee chair.  It is vital for the CCO to create a personal relationship with the chair of the Board committee and the committee members themselves, especially those Board members who take an active interest in compliance issues.relationship5

The CCO has to run a “charm” offensive.  I know the CCO does not have the White House to hold these types of entertainment events but the CCO needs to get out and talk and listen to the Board members, create a relationship and help the Board carry out its duties.

A strong relationship between the Board and the CCO can be invaluable to the CCO.  As the CCO builds and implements a compliance program, there are going to be occasions when the CCO needs internal support and resources to get the job done.  If the Board is on the CCOs side, there is a strong chance the CCO will get what the CCO needs.

The CCO, however, has to be careful.  The CCO cannot overuse this relationship.  Senior management may smile at the CCO but worry about the separate reporting “relationship” the CCO has to the Board.  That is part of internal corporate politics.

Even with these internal political risks, the CCO has no choice.  If the CCO does not build a relationship to the Board, the CCO will forever be under the thumb of the CEO and senior management.  Often that means the CCO will be on the back bench.

With a strong relationship with the Board, a CCO has a chance to succeed at the job, bringing in Board support or dictates when needed to carry out important compliance initiatives.

relationship4A CCO is only as good as his or her ability to communicate the importance of compliance and ethics as a bottom-line enhancement to corporate profitability and long-term sustainability.  The Board is a natural audience for such interests.  The Board should resist short-term profits at the expense of long-term growth and sustainability.

As a result, the Board is the CCO’s natural ally.  The CCO’s education and charm campaign comes down to taking the time and making the effort to develop a strong personal relationship with the Board.

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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