Companies today regularly face corporate ethics and regulatory compliance matters while expanding operations. In light of that, they need a compliance program and an ethics program, and someone to help develop and oversee both. That's where the chief ethics and compliance officer job description comes in.
In case you're interested in a career as a chief ethics and compliance officer and want to know what they do, keep reading.
In this article, I'll give a complete breakdown of the chief ethics and compliance officer job role and its prerequisites.
Let's get started.
Chief Ethics and Compliance Officer [Job Overview]
Simply put, a Chief Ethics and Compliance Officer (CECO) develops and maintains ethical and compliance standards that companies follow whenever expanding operations, recruiting, acquiring further assets, etc.
They lead the company's corporate compliance efforts, analyze and implement all applicable laws pertaining to business operations, and directly address various compliance issues.
On the ethics side, they ensure proper company-wide code of conduct, develop equal opportunity hiring strategies, and implement user experience enhancements for employees.
CECOs are part of the executive management and report directly to the chief executive officer or vice president.
Responsibilities of a Chief Ethics and Compliance Officer
The CECO role may come with a multitude of responsibilities, depending on the host company.
However, there are some basic responsibilities that every chief ethics and compliance officer has to perform.
Here are some of the job roles of a chief ethics and compliance officer in 2020.
Ethical Culture Development
Most modern companies operate on progressive cultures that are reflected in every aspect of their business operations and activities.
The chief ethics and compliance is responsible for devising and then putting together the building blocks of such a culture.
- Working with human resources and analyzing ethics best practices for the entire company
- Meeting with various teams and training them on ethical best practices
- Providing ethics and compliance training to the executive team and senior management
- Developing a progressive training program for all incoming employees
- Continuing ethical oversight of all HR-related operations
Additionally, CECOs are responsible for researching corporate ethics and administering disciplinary measures on ethical violations.
Compliance Audit and Monitoring
Compliance audits are a series of inspections that ensure there are no instances of legal/regulatory noncompliance.
A chief ethics and compliance officer is responsible for coming up with ideal audit strategies for their company while considering the compliance requirements applicable to it.
Their basic responsibilities are:
- Creating compliance audit plans with legal representatives and general counsel
- Developing compliance benchmarks for long and short-term audit plans
- Collaborating with the CCO and management teams to enact compliance functions
- Generating compliance audit reports and forwarding them to external regulatory bodies
- Monitoring and maintaining the company-wide state of compliance
Furthermore, CECOs assist outside (local, state, and federal) regulators in performing external audits.
Risk Program Development
Aside from maintaining ethical and legal compliance, CECOs are responsible for creating and implementing risk management programs.
In addition to that, they provide oversight for legal teams while the latter implement risk plans, as well as maintain communication between the board of directors, major stakeholders, and employees.
This role includes:
- Performing risk assessments with in-house legal teams and counsel
- Functioning as the primary point person for all compliance risk management activities
- Collaborating with general counsel to assess legal risk before each new venture
- Creating custom risk-management programs for the company over extended periods
- Assisting company leadership in making calculated and compliant decisions
CECOs also ensure that every merger, transaction, acquisition, and operations shift gets passed after their assessment and approval.
Organizational Ethics Management
Ethics and compliance officers are the first line of defense against any human resource issues arising within the employee ranks or with regards to external parties.
Additionally, they also develop the ethical outreach and community involvement programs that the company takes part in.
In this capacity, CECOs are responsible for:
- Analyzing the specific needs of the community that subscribes to or surrounds the company
- Develop incentive programs for the community and company employees
- Provide ethical management training to managers and staff that are reaching out to the community
- Add values between the organizational culture and organizational outreach framework
- Work with the HR department to successfully develop community members into viable candidates for company positions
In some companies, the chief ethics and compliance officers may have a more strategy-centric role, while some companies may require them to be directly involved in ethical management.
Operational Process Assessment
Regulatory compliance applies to all company operations, expansion efforts, employees, assets, and leadership. The CECO is the point person for all matters related to compliance oversight.
In this capacity, the chief ethics and compliance officer is responsible for going through all the current operations and making sure that they are up to local, state, and federal regulatory codes.
In light of this, CECOs:
- Develop working lists of all on and off-site operations and organizational processes
- Cross-reference those procedures with regulatory requirements to ensure everything is performed in a compliant manner
- Ensure that employees adhere to internal policies
- Maintain ethics and compliance standards according to the function and role of each department.
- Coordinate with regulators to implement all new regulatory requirements across the board.
This is one of the responsibilities for which companies can hire consultants. However, bigger companies will almost always have an in-house professional for this role.
Qualifications for a Chief Ethics and Compliance Officer
Generally, CECOs have either a Bachelor's degree with extensive experience or a Master's with brief mandatory experience.
Nevertheless, the requisite qualifications for CECOs are:
- Master's degree in business administration (with a focus on corporate ethics and compliance)
- Bachelor's degree in a legal, business administration, human resources, or program management capacity
- 7-8 years of experience with at least 3 years of corporate compliance investigation and fraud examination experience
- Extensive practical experience in a private or public sector apprenticeship
Candidates with a GED or high-school diploma (United States-specific) can also gain some experience in this capacity by applying for a junior administrator position in a smaller company while studying for a Bachelor's.
Additionally, candidates looking to work in a government area such as health care and economics should pursue courses specific to those areas.
Skills Required for a Chief Ethics and Compliance Officer
Aside from the obvious theoretical and practical knowledge, senior ethics and compliance officers need to have a set of general skills in order to succeed in their position.
These skills include:
- Efficient Problem-Solving: A successful CECO is able to look at a complex compliance issue and immediately come up with a solution based on their regulatory experience and subject matter knowledge.
- Extensive Industry Expertise: The chief ethics and compliance officer should have considerable experience in administering compliance measures either in the private or government sector.
- Excellent Communication Skills: Good communication is the basis for ethics and compliance management. A CECO should always be able to communicate legal issues to all parties involved and ensure ethical knowledge delivery throughout the company.
- Project Management: Some companies may require a chief ethics and compliance officer to develop extensive compliance plans. This calls for effective project management and multitasking skills on the part of the CECO.
In addition to this, the ethics and compliance officer should be empathetic towards all employees, irrespective of caste, creed, color, sexual orientation, and/or social status.
How to Become a Chief Ethics and Compliance Officer in 2020 and Beyond
It's no secret that learning has diversified to a great degree and high-level positions such as that of a CECO are coming with a greater variety of responsibilities.
This called for a variety of skills which can only be achieved by taking online courses in subjects and practical applications related to the CECO position.
These online courses deliver learning that candidates will rarely get while at a university.
On top of that, they prepare prospective chief compliance and ethics officers for the challenges of a more ethically demanding corporate environment in the future.
Ethics and smart ethical management are more important now than ever. That said, one can't deny the importance of maintaining strict compliance either.
Anyone who wishes to manage both at a company needs to understand both concepts to the nth degree before applying for the position.
In conclusion, it pays to have a diversified set of skills related to ethics and compliance when you're looking to make a career out of it.