The Chief Compliance Officer (CCO) plays a very important role in the attempt to ensure that a company complies with regulations guiding the profession. Every company with a department for regulatory compliance has a CCO. Compliance means establishing adequate supervision and control of a company’s activities to ensure it complies with applicable laws and regulations.
The primary role of the CCO is to ensure that the company and its employees not only comply with regulatory requirements, but also with internal policies and procedures. He is in charge of the compliance team. The CCO is an expert in subject matter, and also well informed about laws. Most companies employ an individual with a background in law to fill this post. The CCO reports directly to the Chief Executive Officer (CEO), unless otherwise stated.
The CCO also performs subsidiary roles which include:
- Keeping abreast of recent changes in compliance that relates to the industry. It is his duty to ensure that he stays updated with new regulatory compliance that are being made by regulatory bodies guiding the profession. Treating this role with levity can have dire consequences for the company. A company could breach a new regulatory compliance without even being aware, because the law did not exist 24 hours ago. Ignorance would never be accepted as an excuse for breaching compliance, hence the CCO must ensure he stays updated, to ensure the company doesn’t fall prey to the penalties attached to breaching compliance.
- Responding to government investigations and queries. He acts as the principal point of contact whenever the government wants to get in touch with a company for issues relating to regulatory compliance. It is his duty to ensure that the company responds within stipulated time to any form of notice by the government, be it a tax audit notice, or an invitation notice for query. It is also his duty to make sure that he is well equipped with the necessary information to ensure that his company is not found culpable for breaching a regulatory compliance. He must not only defend his company to the best of his ability, but he must also do whatever it takes, within the confines of the law to ensure that his company escapes any form of sanction.
- Coordinating internal compliance review and monitoring activities, including periodic reviews of departments. Just as there are external regulatory compliance that must be abided by, there are also internal compliance that governs the company. Rules, regulations, professional codes of conducts, and ethical standards are among internal compliance that should be abided by to ensure a smooth, and professional running of the company. It is the duty of the CCO to ensure that every employee in the company stays within internal compliance. He does this by reviewing every department in the company periodically to see if employees in a department have been breaching compliance. He is in charge of compliance breach investigations. Those who have been accused would have their fate decided by the board for misconduct. The CCO must also ensure he has played his part in fostering awareness of internal compliance among employees. He should make available within the company’s premises posters with these compliance written on them for awareness, and deploy other possible means to create awareness
- Developing, coordinating, and ensuring participation in a multifaceted educational and training program. This program would enlighten employees and management in the company about regulatory compliance, especially external compliance. It would train them on ways to ensure they comply with federal and state standards. This education on compliance would be made easier if the CCO maintains a compliance website for the company. This compliance website would not only serve as a compliance register for the company, but would also serve as a resource center for other people outside the company who need information on compliance. The CCO should ensure that the program is revised periodically, so as to keep employees abreast of changes in the law, policies and procedures of government.
- The CCO Identifies potential areas of compliance vulnerability. He maps out and implements corrective action plans for resolution of problematic issues, and provides general guidance on how to avoid or deal with similar situations in the future. A good CCO is discerning in nature and has a natural instinct to identify potential compliance vulnerability even before they occur. The CCO also reports on a regular basis, the progress of the implementation of the compliance education and training program to the CEO.