High-profile ethics violations and corporate misdeeds have put compliance at the forefront of companies’ radars.
A lack of compliance comes at a devastating cost, as CareFusion Corp. found when it recently paid more than $40 million to settle allegations that it violated the False Claims Act by paying kickbacks and promoting its products for uses not approved by the FDA.
The Chief Compliance Officer plays a key role in tracking and training individuals in high-risk jobs. While competency and experience are essential, some of the most important factors in a CCO’s success aren’t always easy to measure. They include:
#1 - Strong Leadership Skills
The new CCO must be perceived as both a leader and a peer by others in the C-suite. He or she must work closely with business leaders to understand their goals and gain their confidence so they can have honest discussions. This person must have a deep understanding of the regulatory environment, a vision for the direction the company needs to take within that context and the ability to influence key stakeholders. When new investments or initiatives are needed to support compliance efforts, the CCO leads the charge in championing these causes.
#2 - Ability to Think Strategically on Both Sides
The CCO can only be an effective partner if he or she has a solid understanding of both business objectives and the regulatory environment. This often means formulating creative solutions, rather than simply saying something can’t be done. Ultimately, the CCO must bridge the gap between the demands of regulators and the goals of the company. He or she must understand the current needs and capacities of your company and be able to predict other needs going forward.
#3 - Excellent Communication
The CCO works with a wide range of constituents, from the board, finance department, internal auditors, regulators and others. He or she must be able to speak the language of each group and earn their trust.
In an era when public trust of corporations is at an all-time low, the CCO plays an important role in assuring the public that your company is doing the right thing. He or she will need to work with your corporate communications staff to deliver appropriate messages that emphasize what your company is doing for its stockholders, customers, the environment and the public. The CCO will lead the charge in consumer protection and sustainability practices and reporting progress on a regular basis. Public trust must be earned by leaders who demand greater accountability and transparency. Your CCO sets the tone for this by clearly outlining expectations to management and enforcing them.
The right CCO will lead your company to become more efficient, profitable and transparent. In addition to competencies and specialized experience, there is an extensive list of softer skills that can’t easily be outlined on a resume. Hiring managers and executives must be trained to identify those characteristics.
To read more about what to look for in your next CCO, download our free guide “5 Traits of the CCO Your Company Needs Now.”