With this in mind, we are building a community of compliance leaders who are relatively new to their roles. In this way, they can network with their peers to share insights and discuss concerns.
Our recent roundtable dinner at South Place Hotel brought together some of the brightest minds in compliance leadership. We discussed both the challenges and opportunities that come with being new in the role of chief compliance officer.
Overcoming the new in-role challenge
We have summarised the key takeaways from the roundtable debate to offer some insight into navigating the challenge of being new in a compliance leadership role.
1. Take time to establish yourself
Finding your feet in a new role is a challenge. However, this challenge is magnified when it is a leadership position.
- Understand compliance in the context of the company - in a new role as a Chief Compliance Officer (CCO), it is important to take time to examine business operations. This is the first step in ensuring you get compliance right. This looks different for different companies.
- Build credibility - by understanding the business, you can take the initiative and win the hearts and minds of the board. There is a greater chance of getting buy-in if you understand the business objectives and the product or service. Use their language and find areas that they can relate to. This will help connect with them and establish your credibility, which is invaluable moving forward.
- Pick your battles - starting a role allows you to see everything with a fresh lens and identify what needs attention. However, it is important to pace yourself and not try to change everything immediately. Change has to be slowly done.
2. Make people rethink compliance
It is a fact that most people will not care about the pages of the law, but they will care about the consequences of not complying with the law. The key to engaging people in compliance is to get them to understand why they are doing it.
A CCO needs to be an all-rounder - they need to have industry and technical knowledge while being the first line of defence. By having a broad understanding, a CCO can effectively communicate with individuals and bring home the message that compliance adds value by mitigating risks that would affect not just the company but also the individual.
Compliance can be theoretical until a problem hits the fan and the company is dealing with the consequences of a breach. The real-world problems will always underline the importance of compliance. By focusing on the red flags first and explaining how this can impact the individual, CCOs can engage people in the value of compliance.
3. Build & maintain key relationships
Relationships are a key part of being a leader in compliance, and it's important to understand the basics of relationship dynamics. Apart from building credibility, establishing solid relationships is essential before asking people to do something. If you understand their interests, you can also appeal to them better.
- Invest your time - in the first few months in a new role, finding common ground by speaking with people and understanding how they operate is important. It's an investment of your time. Go from department to department and listen to what employees have to say and their focus.
- Personalise the message of compliance - this is a critical part of getting buy-in from individuals. Resistance to compliance can come from a lack of understanding or care. Think about how to angle the message to resonate with a person so that they know that compliance has their job security at heart.
- Get support from the top - key executives tend to be risk averse, so highlighting the consequences of failure will resonate with them. Know your audience and develop a story where people will listen. To get the message right, you need to know the risks and convey these effectively. For example, Consumer Duty is a real fear factor for boards, so leverage this.
4. Embed a culture of compliance in a company
Company culture will impact everything. It is vital to get a good understanding of the culture from the beginning. This will help you in establishing yourself and knowing the challenges that need to be overcome. Some of these cultures include:
- Management is separate from compliance - in some companies, there is a culture of keeping compliance out of management. This leads to the compliance message getting watered down as it filters through the management layers to get to the board. There is a fundamental issue when there is no clear line of communication between compliance and the board.
- A good news culture - this is often a culture that is embedded in a company. If staff don't see code red, they think everything is alright, and there is no need for compliance. However, code red is when it is too late. Compliance is about prevention. In fact, compliance might save as much money as profitable traders make by preventing fines. There is a growing number of fines where several small failures can add up to massive fines.
Firms are often in denial about regulations being intended for them, so it is important for CCOs to emphasise that applicability tests matter and that there is a real risk of the regulator showing up. There is a serious challenge in breaking these cultures to instil a culture of compliance however, this is vital.
5. Focus on risk management
Establish how you will be able to mitigate the risks facing an organisation. Even at the interview stage, there is a great opportunity to uncover company issues and present a strategy on how to manage these risks. Knowing what you are walking into will help you construct a solid risk management framework and establish a mediation plan.
Most staff don't understand company policies and procedures, so a risk management tactic could involve focusing on junior staff. If the procedures are embedded with them, this could help mitigate risks on a daily basis going forward.
Concerns of a Compliance Officer
We asked compliance officers what keeps them up at night to get an indication of how many concerns are shared. Here are some of the thoughts brought to the table:
- Data protection - there is a real issue with subject access requests and a need for having the right procedures in place
- One mistake that gets escalated to the Information Commissioner's Office (ICO)
- Fraud detection and prevention - this is the highest priority
- ESG and the upcoming anti-greenwashing rules - ESG could be the next GDPR
Join future New in Role dinners
If you want to attend our invite-only New in Role Roundtables, please email Samantha Martin-Woodgate to learn more.
We also have a community group on LinkedIn aimed at compliance leaders.
