A Chief Compliance Officer who lacks working relationships with the business side of a company is like a day without sunshine. No matter how strong or finely tuned a compliance program is on paper – in practice, the success of a compliance program depends on acceptance and embrace by the business.
I am always reminded of meeting a business manager in a company who told me during a risk assessment interview – “Part of my job as a country manager is to ensure ethics and compliance. “ Frankly, I wanted to say, “Amen to that!!”
The key to compliance and many other questions in business is incentives. If you want to make sure everyone completes an annual training requirement, you have to make a bonus or final paycheck contingent on completion of the program. What a surprise – employees will complete requirements if they have to do so to get paid.
When a CCO looks to build working relationships with business and accomplish compliance tasks, a CCO should look for “win-win” tasks – in other words, a situation where the CCO wins and the business wins. How do you do that?
One of my favorite examples is the third party due diligence process. To identify the number and types of third parties, a CCO will assemble a list of third parties. In this process, a CCO should meet with a country or business manager and review the list. The CCO quickly finds out from the business manager that some of the named third parties are no longer active, no longer needed or irrelevant.
The CCO is satisfied because the list is reduced and the business manager uses the process to focus business strategy and update the management and information process.
A CCO can use the compliance process and information he/she obtains to develop important alliances with the business. For example, due diligence information from databases usually contains important intelligence that business operators – sales, managers or other functions – can find useful to their own responsibilities.
These examples demonstrate an important principle. A CCO can be a valuable business partner – not just by “keeping a company out of trouble,” but supporting the business operations. It is important to remember that a CCO, if properly empowered, has a valuable perspective across the organization (i.e. “line-of-sight”). As a result, a CCO has access to important enterprise-related information.
To develop this principle, a CCO has to be creative and has to look for opportunities. A narrowly-focused CCO is his/her own worst enemy, especially when they start to complain about lack of cooperation or support from the business side.
One last example that may not be as obvious is the importance of choosing and collaborating with important business partners in the field. A CCO should look for partners who are predisposed and supportive of the compliance function. A country manager may be less supportive than a financial manager in the country. A CCO may gain more by developing a relationship with that financial manager than the country manager, knowing that he/she may have a stronger ally in the field.
A relationship – like a task – can be a win-win for a CCO. The challenge for every CCO is to assess the interpersonal and functional landscape and pick and choose important business partners. No one rule or approach will work – instead, a CCO has to employ important interpersonal skills to develop important alliances and build a strong, working compliance network within the company.