By: Aarti Maharaj
The changing and increasingly complex global regulatory environment is requiring authorities to pay closer attention to the role of the compliance officer, and now it is expected that Chief Compliance Officers should have direct access to senior decision makers, including the Board. According to DLA Piper’s 2016 Compliance & Risk Report: CCOs Under Scrutiny, most CCOs, believe that reporting to the CEO or Board would help enhance the effectiveness of a company’s compliance program.
CCOs and senior executives are increasingly finding themselves in the crosshairs of regulatory issues—and without a robust compliance program in place, this trend might continue. Last fall, the Yates Memo sent ripples throughout the industry after it was announced that individuals will face an increased risk of personal liability, “it ensures that the proper parties are held responsible for their actions,” the memo states. At the same time, the appointment of Hui Chen, as the Justice Department’s first-ever compliance counsel and the steady flow of guidance from the Securities and Exchange Commission demonstrates the importance of personal liability.
“When CCOs report directly to the Board, they get a chance to delve into what’s working and what’s not,” said Brett Ingerman, co-chair of DLA Piper’s Global Governance and Compliance practice (pictured right). “In turn the Board could request more information about qualitative data, which can help build effective programs.”
One surprising finding is that companies are still struggling with monitoring and auditing their compliance programs. Respondents of the survey said that they considered monitoring to be the weakest link in their programs and it requires the most time. “If you demonstrate to the regulator that you have strong monitoring and auditing protocols, it builds trust and contributes to successfully managing regulatory expectations,” added Ingerman.
Read more about the survey here.