This past year saw big-name companies hit with unprecedented fines and whistleblower payouts. The Financial Industry Regulatory Authority recently fined 10 firms a total of $43.5 million for violations associated with the initial public offering of Toys “R” Us, sending a strong message that conflict of interest violations will not be tolerated. One of those firms, Merrill Lynch, received another $6 million fine for violating an SEC rule regulating short sales. And the Securities and Exchange Commission announced its largest whistleblower payout in history, a $30 million award to an informant who came forward about ongoing fraud.
More than ever, company priorities revolve around managing risk, complying with federal and international regulations and creating an ethical culture.
The need for competent compliance officers to protect a company’s reputation and defend its bottom line has never been greater. As a legal recruiting firm that specializes as a compliance headhunter, we hear this from CEOs and General Counsel alike.
As you prepare to protect the company in the new year, here are three compliance recruiting trends that should be on your radar.
More Companies Hiring Their First CCOs
The growth of tech companies and startups are quickly outpacing their in-house resources, especially in terms of compliance. These companies with non-traditional origins suddenly find themselves unprepared to manage these emerging risks, so they’re hiring chief compliance officers for the first time. Bitcoin and payment solutions startup Affirm were two companies that recently hired their first CCOs.
In the coming year, we expect many more to follow suit. For hiring managers and others unfamiliar with regulatory issues, the process of hiring a chief compliance officer can be intimidating. They may not know where to look, what competencies are most important and what questions to ask.
More Emphasis on Data Protection and Cybersecurity
From the attacks on Target and Home Depot to JPMorgan Chase, company data breaches seemed to make headlines on a weekly basis in the past year. U.S. companies lose approximately $250 billion per year to theft of intellectual property and another $114 billion due to cyber crimes, according to the New York Law Journal.
Protecting sensitive customer data and managing cybersecurity will continue to be a chief priority going forward. Compliance officers with expertise in these areas are in high demand. Hiring managers will need a solid understanding of compensation benchmarks and other factors that motivate these professionals to stand out in an increasingly competitive job market.
Emphasis on Succession Planning
Many companies have a succession plan in place to replace the CEO in the event of an unexpected departure, but the CCO’s role in protecting the company from millions of dollars in fines or losses is just as important.
Hiring a compliance officer can take six months or more for a company that doesn’t have the dedicated resources to seek candidates, evaluate them and follow up.
That’s far too long to be without a safety net. That’s why more companies are recognizing the need to have a succession plan in place not only for the CEO, but also for the CCO and General Counsel.
If your company is hiring a Chief Compliance Officer for the first time, looking for one with specific expertise or planning ahead, consider working with a firm that specializes in compliance headhunting. The right firm will have the expertise, relationships and research tools to identify highly qualified candidates even if they aren’t actively looking.
They’ll be able to assess candidates for the right competencies, behavioral traits and cultural fit to ensure your company is prepared for whatever challenges you may face in the coming year. If you’re ready to talk about your company’s compliance needs, contact us today for a free consultation.