Most of the time you actually stop things, make things better, get things done . Instead, one plus one can equate to corporate process mazes, stopgaps, and redundancies that not only are inefficient but also inhibit easy information sharing. Without a defined reporting structure Further, by creating a separate compliance department and changing the reporting structure (having the CCO report to the board, for example), the company will both be in a better position to prevent and stop corporate misconduct and send a message to employees and regulators that it takes compliance seriously and malfeasance will not be tolerated. Among WME firms, 37 percent of CCOs report directly to the chief executive officer, and another 7 percent report either to the board of directors or the chair of the board — so that’s 44 percent who somehow report straight to the top. Tod Reichert Tod K. Reichert is Chief Compliance Officer, Senior Vice President and Corporate Secretary of MCG Capital Corporation (NASDAQ: MCGC). This one examines job titles, reporting relationships, and staffing. Departmentalization prizes independence over collaboration. 3. ... consulting with management and reporting. So I tell people, “We can have great tone at the top, but the people in the warehouse look at their supervisor, they look at their manager. As many compliance officer interviewees bemoaned, “People are afraid to talk to you or invite you to the table because we are not obligated to keep confidences and they understand that there is no privilege.” As such, separating the compliance function from the legal department may disenfranchise compliance professionals from important conversations and corner them into the role of a cop or glorified tattletale, preventing them from being insider change agents and what Christine Parker calls “persuasively relevant.” So, while they may have autonomy and access to the board, they may not have the network and ability to prevent and persuade. Ethisphere has released another analysis of its World’s Most Ethical companies, finding a move toward a more clearly defined chief ethics & compliance officer role and more direct reporting to senior leadership. Over time these divisions can create silos—and silos are the death knell for the cross-fertilization between different departments that is needed to create new solutions. While no one disputes the importance of compliance and those who do the work, it can indeed be lonely. It attempts to answer whether the CCO should be a new “C” in the C-suite (that is, in charge of a compliance department that is separate from the legal department and does not report to the GC). The Chief Compliance Officer is responsible for the continuous improvement of the program. That reflects, I hope, an awareness among board directors and senior executives that. The launch of the Challenger, despite the evidence that overwhelmingly predicted its demise, is an example of such segmented decision making: the group that recommended launching it (despite the evidence) couched the decision as a “management” one. The first report looked at trends in Codes of Conduct and written policies, among other issues. The compliance officer interviewees consistently made a demarcation between “can” and “should.” One interviewee said, “The lawyers tell you whether you can do something; compliance tells you whether you should.” Another said, “The general counsel’s job is … to advise [the company and senior managers] of the legal risks, but not initiate the conversation over what is the right thing to do. A chief data officer (CDO) is a corporate officer responsible for enterprise-wide governance and utilization of information as an asset, via data processing, analysis, data mining, information trading and other means.CDOs usually report to the chief executive officer (CEO), although depending on the area of expertise this can vary. Why Chief Compliance Officers Are More Important Than Ever. A series of underemphasized and unintended consequences of departmentalization are important to draw out in order to answer the “so what” question more appropriately. Departmentalization applauds form over function. In other words, simply because the chief compliance officer has a “C” for “chief” in their title does not mean they have clout and credibility with the board, CEO, or other business leaders. In practice, that does not mean day-to-day reporting; instead, it means at least quarterly reporting to the board or the audit/compliance committee and continuing, informal communications with the head of the audit/compliance committee. Byrne says part of what is driving the shift in reporting structure toward the chief executive role is an increasing “recognition on the part of companies that, in order for compliance to be seen in the organization as a strategic function, the compliance officer has to have a seat at the senior table.” That is, if a compliance officer manages to wriggle free of reporting to the general counsel, instead reporting to the board or the CEO — does he or she then gain more power to talk about the compliance implications of strategic issues? The latter takes years to build. Should they have legal, management, or other training like psychology, sociology, or organizational motivation? America’s Missing Stories: The HistoryMakers’s effort to preserve Black leaders’ experiences in their own words So why not establish a role dedicated to bringing those issues to light, and then inculcating awareness across the whole enterprise? https://thepractice.law.harvard.edu/article/americas-missing-stories/, Where academic research and practical advice come together, Volume 2 • Issue 5 • July/August 2016. In other words, how people classify a decision affects the decision they make. This conclusion leads to unanswered but important questions: Regardless of the organizational structure and title, who should oversee compliance? Where the Chief Compliance Officer ... corporate information and reporting system, which the board concludes is adequate, exists, and that failure to do so under some circum-stances, may, in theory at least, render a … This in the wake of investment firm employees or executives acting as chief compliance officers, on top of other responsibilities. Compliance Hotline: 443-481-1338; Email: compliance@aahs.org; Mail: Compliance Officer, 2001 Medical Parkway, Belcher Pavilion, Suite 203, Annapolis, MD 21401; Deneen Richmond: Chief – Quality, Patient Safety & Population Health Officer – Luminis Health. In doing so, they are creating new departments, positions, and ethics-training programs. 1. The risk is not just that lawyers may be viewed as technicians and (choose to or be pressured to) refrain from counseling their corporate clients on the social, ethical, and moral risks of legal decisions. Worse yet, it may create a false sense of complacency about compliance. And if we do Y, we’ll make a billion dollars but have no legal risk. Should a CCO report … The common view in the literature, in many governmental agencies and regulatory bodies, and in my interviews is that compliance professionals—even if they have a law degree, passed the bar, and/or have served as lawyers for the corporation in the past—are not acting as lawyers or providing legal advice when performing compliance functions. The first report looked at trends in Codes of Conduct and written policies, among other issues. Last month’s column addressed the security organization reporting to the General Counsel, which studies show is one of the more common reporting relationships for security executives. They delegated Board oversight to the Audit Committee and executive day to day oversight to Fluor's Chief Compliance Officer. Reports to company CEO. 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