The role of the CCO has steadily grown in stature and prestige over the years. In the 2020 FCPA Resource Guide, under the Hallmarks of an Effective Compliance Program, it focused on the whether the CCO held senior management status and had a direct reporting line to the Board.
This Hallmark was significantly expanded in both the 2020 Update and the FCPA Corporate Enforcement Policy. And in so doing, the DOJ has increased the prestige, authority and role of both the CCO and corporate compliance function. The 2020 Update has five general areas of inquiry around the CCO and corporate compliance function. (1) How does the CCO salary and stature within the organization compare to other senior executives within the company. (2) What are the experience and stature of the CCO with an organization? Does the CCO have appropriate training for the role? (3) How much autonomy does the CCO have to report to the Board of Directors? How often do the CCO meet with directors? Are members of the senior management present for these meetings with the Board of Directors or of the Audit Committee? (4) What is your structure? Is the compliance function run by a designated chief compliance officer, or another executive within the company, and does that person have other roles within the company? (5) Is data in your organization so siloed that the CCO does not have access to it? If so, what are you doing about it?
Once again for the compliance professional, the FCPA Corporate Enforcement Policy and 2020 Update make the importance of a best practices compliance program even more critical. The DOJ is focusing more on the role, expertise and how the compliance function is treated within an organization. Pay your CCO considerably less than your GC? You may now better be able to justify that discrepancy. If you have a legal department budget of $3 million and a compliance department budget of $500,000; you may be starting behind the eight-ball.
Three key takeaways:
- How can you show the CCO really has a seat at the senior executive table?
- What are the professional qualifications of your CCO?
- Does your CCO have true independence to report directly to the Board of Directors?
Chief Client Officer Jac Dunne joined CSS with over 30 years of investment and securities business experience with a strong focus on managing client delivery and operations. She most recently served as Chief Commercial Officer and Executive Director at AssetLogic Limited. Jac has also held senior leadership roles at Bank of America Merrill Lynch, HSBC and BNY Mellon. At BNY Mellon, Jac helped establish the bank’s European Derivative Clearing business and, working closely with regulators and government departments, obtained the first MiFID clearing license in Ireland.
