People love to give advice – they love to tell people what to do (and hear themselves talk). In order to be effective, compliance professionals have to be able to “listen.” That means more than just being polite and paying attention when people speak. The ability to “listen” means a willingness to consider new ideas, alternative strategies and approaches to compliance issues.
We all know that corporate boards play an all important role in an effective compliance program. Not as much attention is paid to the operation of senior executive compliance committees. This is a different animal than the compliance committee at the board level. A senior executive compliance committee consists of the key senior corporate officers needed to carry out an effective compliance program.
A PWC Compliance Survey conducted last year found that 71 percent of surveyed companies have a senior executive compliance management committee. But not all committees guarantee success. Some committees work well and some do not.
The success of a committee depends on the mission, the structure and the processes of the committee. The mission of a committee is defined by not only its role and responsibilities but whether or not it is empowered by the company to carry out its responsibilities. The CEO and other senior managers have to commit the mission to the committee and make sure it has the backing of the company’s leadership.
Assuming the senior executive compliance committee has the proper mission and is fully empowered, the membership of the committee is crucial to carry out its mission. The compliance committee should include: (1) CEO; (2) CCO; (3) CFO; (4) General Counsel; (5) Chief, Internal Auditing; (6) Chief Operating Officer; (7) Human Resources; (8) Information Technology.
With these senior managers, compliance issues can be identified, assessed, and resolved, so long as the company maintains a commitment to compliance and this process. This structure is essential to an effective compliance and ethics culture.
With a commitment from senior management and the appropriate structure, the senior executive compliance committee has to put in place effective processes to ensure that information is shared among the committee members, issues are identified for analysis and resolution, and business intelligence and plans are shared with key compliance players.
Proactive management requires effective processes which elevate the right issues at the right time for the committee to resolve. Technology has to be leveraged for the committee to succeed. If technology is a hindrance, then the committee’s operations will be frustrated.
A compliance committee depends on integration of individual processes into an integrated whole.
A compliance committee’s challenge is to align the right people, processes and technology to view risk across the company, and to ensure that key stakeholders on the committee have the right resources to implement a successful company-wide compliance program.