Chief compliance officers can occasionally suffer from a “complex” (akin to the Jungian one). CCOs and their priorities are often pushed aside in favor of “more important” corporate initiatives. CCOs are used to fighting for their initiatives and standing firm when challenged by so-called “competing” priorities.
ESG is not a threat to compliance; it is an opportunity. CCOs cannot be shy when it comes to ESG. CCOs have to embrace the ESG initiative, ensure a seat at the table, and wait for opportunities to advance the compliance function as part of the Big “G” portion of ESG, that is, Corporate Governance.
An ethics and compliance program is an essential part of corporate governance. As such, an ethics and compliance program has to be factored into any ESG program. Frankly, given a CCO’s perspective across an organization and implementing ethics and compliance controls in the business, CCOs should be important players in the ESG landscape. CCOs know how to build company-wide controls, seek business buy-in, and leverage internal partners to maximize the impact of an ethics and compliance program. CCOs act in this sphere every day, and their subject matter expertise makes them essential to the ESG design and implementation.
In exchange for their contributions, CCOs have to leverage their expertise for their own purposes – not in the selfish “me” perspective, but in the “one for all and all for one” motto, to build a better ethics and compliance program as part of a corporate governance initiative demanded by the ESG focus.
CCOs should have established positive relationships with key constituencies – the board/audit committee, CEO and senior management, and business management. The success of an ethics and compliance program depends on these valuable relationships and support. This same prerequisite applies to ESG. Hence, my point, a CCO can bring about important focus and initiative when it comes to building the governance portion of the ESG program.
Please do not get me wrong – I am not cynical about ESG. It is a valuable and critical focus for corporations because investors, the public, the government and other key stakeholders are demanding it. Corporate accountability is often a positive force for improving corporate good citizenship.
My point is only to remind CCOs to stay focused. Keep your eye on the ball. It is important to fully embrace the ESG initiative and contribute as much as you can, given your focus on ethics and compliance. Look for opportunities to leverage ESG to enhance governance and ultimately your ethics and compliance program.
A CCO should be effective in accomplishing results. Successful CCOs are adept at working with natural internal partners because it is essential to their day-to-day activities. A lone CCO is an unsuccessful CCO. With this mindset and perspective, a CCO can seek “governance” improvements as a key part of any ESG program. In certain respects, a governance improvement plan is low-hanging fruit for an ESG Director, it is a given that a CCO can help to bring about such positive changes by enhancing the company’s ethics and compliance program.