Chief Compliance Officers have a hard enough job without getting into turf battles. Unfortunately, I hear all too often about the intra-company squabbling among the CCOs, General Counsels and Internal Auditors. Rarely, have I seen situations where everyone cooperates. Internal turf wars are not surprising nor are they nothing new.
But when it comes down to overall compliance and staying out of trouble, CCOs and GCs can – and should — be each other’s best friends. They are in the same line of work, and their responsibilities and roles can be fairly easily divided. And they can – and should – make each other look good.
In basic terms, the GC guides the company on legal issues and helps to draw lines in grey areas to identify conduct which may be illegal. Of course, there are many other aspects to the job.
The CCO, on the other hand, is charged with making sure the company stays within the lines of legality and illegality. Within the company, they are the proactive force – the messengers – promoting the GC’s determinations and protecting the company from illegal conduct.
The CCO needs the GC to address difficult legal issues so that policies and procedures are correctly drawn. The CCO promotes the GCs interests by designing and implementing policies and procedures to ensure company compliance. GCs should embrace and coordinate with the CCO at every step. Take a basic example – risk assessments conducted by CCOs can be immediately integrated into legal tasks for identifying potential legal issues and analyzing potential consequences from such conduct.
Forgive me for being an idealist but on paper this is how it should work. Common interests should lead to cooperation. Turf battles can have a devastating impact on company compliance. The lack of coordination can lead to mixed messages.
Many times I hear that compliance staff is not included in important legal meetings where important strategy issues are decided. The failure to bring CCOs into the C-level suites can create what I call operational disparities. Lawyers have more authority than compliance officers to inform employees on steps needed to comply with the law. As a result, compliance offices are relegated to lower level functions such as conducting training and basic tasks, while larger policy and compliance issues are reserved by GC.
Many times operational disparities reflect the lack of corporate commitment to treating CCOs as C-level officers, the personalities involved, and turf wars over resources.
Enlightened corporate leadership can lead to brilliant results. GCs and CCOs can be each other’s best friends with incredible operational efficiencies, all of which leads to increased compliance. In the end, the company’s path reflects decisions and directions from the top – the Audit or Compliance Committee and senior executives. Ultimately, the path chosen can mean the difference between compliance and disastrous enforcement actions against the company.