Lastly, what roles should compliance officers play to best execute the compliance function? To increase transparency and ensure that lawyers were billing ethically, firms began demanding lawyers report their time spent per client in smaller and smaller increments. The first report looked at trends in Codes of Conduct and written policies, among other issues. The general counsel’s job is more black and white; [for example,] ‘These are the legal risks.’”. Departmentalization is the wrong answer because the right question is not about the CCO’s independence or the corporation’s organizational structure, but instead about function: how can a corporation leverage the research on connectivity, informal norms, ethics, and motivation to create effective compliance and ethics initiatives and culture? The first report looked at trends in Codes of Conduct and written policies, among other issues. By closing this banner, scrolling this page, clicking a link, or continuing to browse this site, you agree to this use. Even critics of the independent arrangement agree that “it has long been settled that the chief compliance officer, whether also the chief legal officer, should have a direct line of reporting to a board audit committee, which has substantive oversight.” 11; Apparent preferred structure of … There is sometimes some confusion within the law department itself as far as that distinction is concerned, and there is also sometimes confusion from internal clients [who] think, “Oh, I can just go straight to the [CLO] for legal advice,” and I have to tell them, “I’m glad to talk to you, but I’m not acting as a lawyer; what we’re talking about is not privileged; and if you want legal advice, you will probably have to go down the hall to somebody else.”. . It brought up for me the question of who should a Chief Compliance Officer (CCO) report to … Indeed, much has been written about the time it took for GCs to get their seat in the C-suite—to move from being considered second-class citizens to being one of the highest-ranking, highest-paid, and most influential corporate executives at large publicly traded corporations. But [because] a number of major companies have done it over the years, it starts to look like a best practice. In essence, the expectation that the lawyer play the role of legal technician devoid of any ethical “should” function traps lawyers in an attorney-client relationship that is one of agency wherein the lawyer, as agent, owes a duty to his or her client (the corporation) to promote the client’s interests above all else. The counselor – In this role, the compliance officer serves as a consigliore to senior management, offering judgments that span compliance, law, politics, and other arenas. Why Chief Compliance Officers Are More Important Than Ever. Compliance Hotline: 443-481-1338; Email: compliance@aahs.org; Mail: Compliance Officer, 2001 Medical Parkway, Belcher Pavilion, Suite 203, Annapolis, MD 21401; Deneen Richmond: Chief – Quality, Patient Safety & Population Health Officer – Luminis Health. Further, departmentalization is doomed to failure if the decision to do it, and the resulting compliance department, does not reflect and/or promote the necessary values, norms, and ethics of the corporation. For many corporations, there is now a new “C” in the C-suite—the chief compliance officer, or CCO (see “The Emergence of Compliance: A new profession?”). Policies/ Procedures. This puts great pressure on CEOs and boards of directors to make smart hiring decisions. In some companies, Compliance does not have its own Officer. As many compliance officer interviewees bemoaned, “People are afraid to talk to you or invite you to the table because we are not obligated to keep confidences and they understand that there is no privilege.” As such, separating the compliance function from the legal department may disenfranchise compliance professionals from important conversations and corner them into the role of a cop or glorified tattletale, preventing them from being insider change agents and what Christine Parker calls “persuasively relevant.” So, while they may have autonomy and access to the board, they may not have the network and ability to prevent and persuade. Those in favor of preemptive departmentalization invariably purport that it is in the public’s interest and will increase: The common argument for separating compliance from legal goes as follows: Lawyers, given the rules and standards of the profession and their duties to their clients, are not independent enough to be able to report corporate malfeasance. Worse yet, it may create a false sense of complacency about compliance. Considering the range of opinions on how to comply with the requirement of Article 38(3), a direct reporting to the company’s general counsel/head of legal or chief compliance officer (as the data protection compliance effort generally lies with either legal or compliance), may be an efficient and sufficient solution. Community Home Discussion 12.9K Library 397 Events 0 Members 1.8K By working separately from the GC’s office (and outside the lawyers’ rules of professional conduct), the CCO will have the requisite autonomy to uncover and report noncompliance, thereby increasing transparency into corporate misconduct—especially during governmental investigations or queries. Transparency into the corporation so that misconduct can be uncovered and prosecuted and future misconduct deterred, The ability for a corporation to establish a functional culture of ethics and compliance that goes beyond the letter of the law, The impact that internal networks have on effective compliance, How people are motivated intrinsically and extrinsically. Departments chief compliance officer reporting structure developing compliance and ethics in order to answer the “so what” more. Commitment and cooperation of employees around the globe are facing a daunting challenge in the C-suite roles... 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