All organizations and government agencies need to follow a strict compliance program to ensure they don’t break any rules and laws. Therefore, companies hire compliance officers to manage all compliance issues, and the head of these officers is the Chief Compliance Officer (CCO).
The duties and responsibilities of a chief compliance officer can vary depending on their industry. For example, corporate compliance will be very different from regulatory compliance in a federal department.
In this article, we’ll take a closer look into the roles, duties, and abilities of a chief compliance officer.
What Does a Chief Compliance Officer Do – Typical Roles in Organizations
The chief compliance officer of an organization or governmental agency primarily oversees, manages, and ensures the regulatory compliance within that organization.
Typically, the CCO reports to the Chief Executive Officer (CEO). However, in some cases, the CCO also reports to the Chief Financial Officer (CFO) and the Chief Information Officer (CIO). In any case, the chief compliance officer is an executive-level position and requires the person to work with fellow executives.
Therefore, the chief compliance officer also needs to understand business administration along with compliance management.
The state of compliance of any organization determines its relation to the market and the United States government. Therefore, it’s crucial to ensure that all compliance requirements are fulfilled. However, some chief compliance officers also develop positive relationships with regulators to ensure better compliance.
There are different regulatory bodies for each aspect of an organization. The compliance manager and senior management are responsible for keeping track of each kind of compliance. The chief compliance officer has to ensure that compliance management is taking every regulatory requirement into account.
The chief compliance officer position can be tricky at times due to conflicts of interest. That usually occurs when you have to ensure compliance standards are met, but that would mean disaster for the organization. At that point, either the chief compliance officer can let go of compliance activities to avoid organizational loss or purposely damage the company by enforcing compliance policies.
However, most companies are required by law to have their chief compliance officer sign an official document that says they’ll enforce the law first. In any case, the chief compliance officer also has to relay such compliance risks beforehand so every stakeholder involved can work on a solution.
Therefore, chief compliance officers need excellent analytical skills to work out potential issues.
What Does a Chief Compliance Officer Do – Duties and Tasks
All chief compliance officers tend to work in slightly different capacities in organizations. Primarily, the industry matters a lot. For example, a chief compliance officer for a financial services company would have to understand various financial regulations, laws, and conduct internal audits, as per the law.
Therefore, each industry has its compliance functions and regulations; thus, making each CCO’s job slightly different.
In any case, the following duties, tasks, and responsibilities are what the typical chief compliance officer has to manage:
- Report directly to the CEO, CFO, and CIO relaying all compliance-related news and updates.
- Develop an annual compliance work plan that reflects the organization’s approach and characteristics.
- Define a certain level of knowledge and understanding of current and upcoming regulatory compliance standards across the company. This is to ensure all relevant stakeholders understand regulatory requirements and why the company is implementing them.
- If required, revise the company compliance plan due to changes in organizational direction, change in regulations, or other matters.
- Oversee, monitor, and manage the implementation of the company-wide compliance program.
- Read and analyze compliance reviews to better understand where the organization is lacking in terms of regulatory compliance.
- Guide, oversee, and manage the compliance teams and management to ensure they’re productive and effective.
- Provide guidance, training, and advice to various departments, including the financial, marketing, human resources, and other departments, to improve their understanding of the laws, rules, and regulations.
- Work with the general counsel to ensure all laws are taken into account.
- Develop risk assessments along with the risk officer to evaluate potential compliance issues. Take an active part in the risk management of such issues to ensure there are no ongoing issues.
The duties, tasks, and responsibilities listed above can be expected from every chief compliance officer. However, each organization will have specific tasks.
What Does a Chief Compliance Officer Do – Skills and Abilities
A chief compliance officer can have different tasks and duties, but the skills, abilities, and qualifications required remain the same. However, different industries will expect the CCO to have knowledge of regulations pertaining to that specific industry.
On average, the chief compliance officer is expected to have the following qualifications, skills, and abilities.
- A bachelor’s degree is required in a law-related field. A Juris Doctor degree is preferred but not necessarily required in most cases.
- At least seven to ten years of experience is needed in an organizational setting. Most companies prefer prior experience to be in the same industry to ensure that the CCO understands all the regulatory requirements from the start.
- Excellent knowledge of various federal and state regulations is required, with respect to the industry. For example, understanding the GDPR Data Privacy Regulations is usually expected from most CCOs.
- Ability to manage various computer-related tasks is necessary. The CCO should have strong computer skills and should be familiar with various Microsoft Office products, such as Word, Excel, Outlook, PowerPoint, and SharePoint.
- A good understanding of various organizational compliance standards is also needed. For example, the CCO should understand the state healthcare regulations, 401k requirements, and more.
- Superior research and analytical skills are needed to ensure you are up to date with the latest laws, rules, and regulations.
- Strong management and functional skills are needed to manage the compliance management team.
- The CCO should have a proactive approach to identifying risks and have problem-solving skills to develop creative solutions.
- Excellent communication skills are required to work with executives, senior management, and various stakeholders.
- Outstanding interpersonal skills are needed to develop good relations with regulatory bodies.
The skills, qualifications, and abilities listed above are what the average chief compliance officer should have, but they may vary in different organizations.
How to Become a Chief Compliance Officer
According to Glassdoor, the average chief compliance officer salaries in the United States can be rounded up to $149,943. The typical range for the average salary is between $83,000 and $218,000, with the higher end being offered in cities, such as New York and Washington, DC.
The chief compliance officer salary tends to vary in different industries and organizations. For example, a CCO in the financial industry is bound to earn more because of all the additional regulations and compliance standards they have to take into account. Alternatively, a CCO in retail wouldn’t have to worry that much, thus earning slightly less.
All chief compliance officer jobs are considered to be at the executive level. Therefore, it can take years to become a chief compliance officer. Typically, you start in the legal department as a risk officer, compliance officer, or attorney. You then work your way up to senior management, and then towards the chief compliance officer position.
Some companies tend to hire outside counsel for compliance matters. As a result, some companies have contractual chief compliance officers. However, they only hire CCOs who have had years of experience in the same industry and in the same type of organization. However, most companies hire full-time CCOs to avoid over-the-top conflicts of interest.
It’s advisable to brush up on industry-specific laws, rules, and regulations before applying for any chief compliance officer job. Furthermore, a working relationship with regulators, regulatory bodies, and the State Bar Association also helps.
In any case, you should portray yourself as a by-the-book compliance officer that can help companies be more compliant without many issues.
Becoming a Great Chief Compliance Officer
Becoming a great chief compliance officer is about getting as much experience as you can in your industry. The more experience you have, the more you’ll understand the laws, rules, and regulations of that industry. Furthermore, you’ll develop a knack for developing great compliance policies and programs.
More importantly, you’ll develop working relationships with the regulators, regulatory bodies, and other stakeholders.
It’s always advisable to take the opinion of other compliance officers, attorneys, and the general counsel before recommending actions or developing compliance programs.
Most importantly, it’s crucial to avoid any conflicts of interest and work in the interest of the law and the organization simultaneously.