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Chief Compliance Officer Role and Responsibilities

Every organization faces some level of risk due to several regulations and compliance standards. It’s imperative to ensure you’re completely compliant. That’s where compliance officers come in, and the chief compliance officer role manages them all. 

The chief compliance officer role and responsibilities tend to vary depending on the industry and organization. For example, corporate compliance tends to work differently than federal compliance. 

In this article, we’ll take a closer look at the chief compliance officer role and their responsibilities. 

Who is the Chief Compliance Officer? 

The chief compliance officer (CCO) monitors, oversees, and manages compliance issues and matters within their organization. 

The chief compliance officer makes sure that their organization is taking care of its regulatory compliance and regulatory requirements. Furthermore, they have to ensure that all organizational employees are in adherence to corporate policies and procedures. 

The compliance officer position was initially needed in heavily regulated industries such as healthcare and the financial services industry. However, other companies followed suit during the 2000s accounting scandals. During that time, the Sarbanes-Oxley Act was enforced, along with recommendations from the U.S. Federal Sentencing Guidelines. The chain of events eventually led to thousands of CCOs being appointed in across the United States. 

As a result, thousands of organizations in hubs such as New York, San Francisco, and other major cities created compliance departments. The compliance department works side by side with the legal department and senior management. Usually, the compliance department has several compliance officers working with different departments. 

At the top, the chief compliance officer manages all the other compliance officers while also assisting in business administration. 

The Chief Compliance Officer Role 

The chief compliance officer of an organization or agency is responsible for managing compliance risk, developing company policies for compliance, and monitoring compliance issues. 

Usually, the CCO role is on the executive level. Therefore, the chief compliance officer reports directly to the Chief Executive Officer (CEO). In some companies, the chief compliance officer also works with and reports to the Chief Financial Officer (CFO), Chief Risk Officer (CRO), and the Chief Information Officer (CIO). The chief compliance officer may also have to work with senior management and report to the board of directors in some companies. 

Each company’s compliance function determines its relation to the overall market and the government. Therefore, it’s imperative to fulfill all compliance requirements and legal requirements to maintain a good image with the regulatory bodies. 

As a result, some chief compliance officers tend to keep good relations with the regulators and compliance professionals. 

Each industry has different regulatory bodies, and there are different regulations for each organizational department. For example, the human resources department would have different compliance issues than the finance department. 

It’s the chief compliance officer’s job to make sure that all organizational departments are implementing the compliance program. The chief compliance officer role also involves doing compliance reviews to minimize compliance risk. 

However, the chief compliance officer can be privy to a conflict of interest. Conflicts of interest usually occur when you have a duty of implementing compliance plans, but it stands to hurt the organization somehow. The chief compliance officer has an ethical duty to always report any compliance issues. Especially if they’re part of the in-house compliance department. At that point, their primary directive is risk assessments and mitigation. 

In any case, CCOs have to maintain a certain level of confidentiality when working with organizations. 

Responsibilities of a Chief Compliance Officer 

Every chief compliance officer has to work in several capacities in different organizations. The responsibilities and duties mostly depend on the organization and the industry. For example, a chief compliance officer in the finance industry would have more responsibilities with tons of financial regulations, internal policies, internal audits, and other compliance requirements. 

In any case, the following responsibilities, tasks, and duties are what the typical chief compliance officer role entails. 

  • Reports directly to the executives, including the CEO, CFO, CIO, and the CRO relaying all news and updates related to compliance activities. 
  • Explain and define a certain level of knowledge of compliance standards that each employee should have in various departments. 
  • Help relevant parties understand certain applicable laws, such as the GDPR Data Privacy Regulations. 
  • Develop an annual compliance work plan, along with the general counsel that reflects the organizational approach. 
  • Revise existing compliance plans if there is any change in regulations, organizational direction, or any other relevant reason. 
  • Oversee the compliance program and plan and manage the internal controls. 
  • Work with the compliance and legal teams to ensure they’re on track and working efficiently. 
  • Provide guidance, advice, and training to all the departments regarding relevant laws, rules, regulations, and compliance standards. 
  • Read, review, and analyze compliance reviews to figure out if there are any compliance issues. After figuring out the issues, develop workable and effective solutions to counter the problem. 
  • Develop and manage risk assessments with the risk management department or the risk officer. Evaluate potential compliance issues, take part in risk management, and ensure there are no long-term problems. 

The responsibilities, tasks, and duties listed above are common for most chief compliance officers. However, you will find that some organizations will have industry-specific responsibilities too. Furthermore, each company tends to also have some organizational changes. 

How to Become a Chief Compliance Officer 

The chief compliance officer role is one of the highest positions in an organization next to the executives. According to Glassdoor, the average chief compliance officer salaries in the United States can be summed up to $149,943. Furthermore, the typical salary range for the chief compliance officer salary is between $83,000 and $218,000, with the higher range offered in cities such as New York and San Francisco. 

Considering that the chief compliance officer salary is very high compared to the national average, it’s safe to say that the position is essential. However, the salary also tends to change according to different industries and organizations. For example, chief compliance officers in a company in the financial sector would be paid more due to additional responsibilities and expectations. Alternatively, a CCO in a retail company may not be paid equally. 

The chief compliance officer role is an executive role where they work directly with the executives or with senior management. In any case, it can take years to reach a level where you can become a chief compliance officer. 

You have to start out as a compliance officer, risk officer, or an attorney. You can then make your way up to management and to the executive level. 

However, it’s best to have a Juris Doctor degree or a master’s degree in a related field. Along with years of experience, you need to be able to show your background that needs to be entirely law-related. 

You should always brush up on industry-specific laws, regulations, rules, and compliance standards. It’s crucial to have all the necessary information at the back of your mind as the chief compliance officer. 

Try and keep a good relationship with the State Bar Association, regulators, and the various regulatory bodies. Most importantly, practice compliance in an ethical way. 

Understanding the Chief Compliance Officer Role to Become a Great CCO 

Becoming a great chief compliance officer requires you to have a complete understanding of the law and compliance standards. It’s crucial to remember and understand the chief compliance officer role and all the responsibilities that come with it. 

Most importantly, you need to rack up a lot of experience to justify your worth. It’s best to focus your career on any one industry so you can learn as much as you can. Staying in the same industry helps you understand compliance better while giving you plenty of helpful resources. 

The working experience will eventually let you develop excellent compliance programs and policies for your organization. You’ll also be able to develop working relationships with various regulatory bodies, regulators, and other stakeholders. 

Furthermore, it’s also best to have a good relationship with other chief compliance officers, general counsel, and compliance officers. You can employ their help in drafting recommendations, advice, and developing compliance plans. 

Most importantly, it’s critical to avoid any conflicts of interest. It’s important to work ethically and in the interest of the organization that hired you.

By Josh Fechter

Josh Fechter is a partner at Corporate Compliance HQ and has founded several companies in software and training.