The Volkov Law Group

Chief compliance officers need the support and advocacy of the corporate board to have a chance to succeed.  A CCO has many important relationships to protect and nurture within the company.  None is more important than the CCO’s relationship with the Board.  In recognition of this basic requirement, CCOs have to dedicate themselves to building a strong and positive relationship.  A basic list of four requirements is a good starting point.

Establish a Personal Relationship with the Board Chair. Whatever board or board committees you report to, a CCO must maintain a strong personal relationship with the Board Chair.  A CCO who is in regular contact with the Board Chair can ensure effective coordination on important issues, develop a strong personal relationship built on trust and gain the support of the Board Chair on issues that may arise with the CEO and Senior Management.

CCOs should try to meet with a Board Chair at least once a month – whether for coffee, breakfast or some other alternative venue.  Board Chairs are people just like CCOs and sharing a meal, a regular call, or other interaction breaks down any social or professional barriers to understanding the Board Chair’s life and perspective.  CCOs are generally positive performers in inter-personal relationships and interacting with the Board Chair is a critical relationship to establish.

CCOs who have strong relationships with the Board Chair will be able to call each other when issues arise, questions come up or coordination is needed.  If the Board Chair advocates for the CCO, most Board members will follow suit.

Protect the CCOs Periodic Reporting Cadence. CCOs should personally appear in front of the Board or Board Committee every quarter.  CCOs have to protect this cadence and ensure that his/her presentation is at a minimum  30 minutes long.  Ten or fifteen minutes is not acceptable and CCOs have to advocate for at least a 30 minute time segment to cover the most important ethics and compliance issues.

A written report submitted to the Board Committee is not an adequate substitute for a personal appearance before the Board.  A personal appearance affords the CCO an opportunity to read the Board Members on their responses to important issues discussed and again breaks down barriers or pre-conceived notions of a CCO or Board Members.  Nothing can substitute for personal interactions.

Preserve the Executive Session. CCOs often are given an opportunity for an Executive Session before the Board.  The CCO is given a chance to raise any issues with the Board Committee without any other senior management in attendance. This is an important opportunity for CCO to raise issues that may already have been raised with senior management and/or the CEO.  An executive session gives the CCO an important opportunity to provide important information unfiltered or constrained by the CEO or senior management.  In this situation, Board Members who are sensitive and aware of internal machinations of every company will take this opportunity to understand the real issues of concerns beyond any sanitized (We are all in agreement)  presentation by CEOs and senior management.  Board Chairs and Members often raise concerns and seek a real understanding of the behind the scenes disagreements among CEOs and senior management.

Maintain Transparency in the CCOs Work. CCOs are only effective if the Board trusts the CCO.  To this end, CCOs have to learn how to deliver “bad news” along with “good news.”  A CCO has to report and interact with transparency – meaning honesty and by providing access to information that is needed by the Board.  A CCO’s effectiveness is only as good as his/her trust and integrity.  Honesty and transparency are what is essential to a CCOs’ effectiveness with the Board.

×