I am looking at what skills will be needed for the mid-century Chief Compliance Officer (CCO). Moving into the CCO chair today is far beyond compliance expertise and legal knowledge. In Part 1 of this two-part series, I reviewed the soft skills most current CCOs have. In part 2, I want to consider the strong social skills a CCO will need as we move into 2030 and beyond. In a recent Harvard Business Review article (HBR), entitled “The C-Suite Skills That Matter Most”, authors Raffaella Sadun, Joseph Fuller, Stephen Hansen, and PJ Neal looked at this issue in the context of the Chief Executive Officer (CEO) position. I have adapted their work for the CCO role.
Training for new CCOs must change as well. No longer will a law school degree with one course in the Foreign Corrupt Practices Act (FCPA) be sufficient as a basis for a CCO. CCOs will need to systematically build social skills. This can certainly start in law or business school, but companies need to consider this role in their internal development for CCO candidates and indeed their entire corporate compliance function. This means going beyond simply preparing up and grooming compliance professionals to become a CCO through developing a “deep competence in a variety of administrative and operational roles.” This is because the mid-century CCO will need to “form constructive relationships with colleagues, customers, regulators, and suppliers” to fulfill the obligations of a corporate compliance function going forward.
As I noted earlier in Death of Dos Santos and Leadership at the Top, the background due diligence process around CEOs is becoming more important. But more than computer assisted research for background checks, the authors believes that “getting references is also problematic.” Most CCO searches are conducted with a high degree of confidentiality. However, the people conducting CCO interviews and those providing references are likely to be part of the “same small, homogeneous networks as most of the candidates, which significantly heightens the risk of bias in the decision-making process. They might mistakenly assume that those individuals possess broadly applicable social skills simply because they connected easily with them in interviews.”
In their executive development programs, companies today need a systematic approach to building and evaluating social skills for all executives, including compliance professionals and specifically CCOs. The authors believe such skills “may even need to prioritize them over the “hard” skills that managers presently favor because they’re so easy to assess. Companies should place high-potential leaders in positions that oblige them to interact with various employee populations and external constituencies and then closely monitor their performance in those roles.”
Beyond the assessment of social skills, companies need to highlight social skills development for the compliance function and potential CCO candidates. Interestingly, the authors believe that it is “inherently risky to put an outsider—even someone carefully vetted—in a senior role. Companies thus will benefit from a “grow your own” approach that allows internal up-and-comers to hone and demonstrate a range of interpersonal abilities.”
Moving forward the authors believe that more often, companies are “on the lookout for people with highly developed social skills—especially if their organizations are large, complex, and technologically intensive.” It is the final intensive technical requirement that many compliance professionals and CCO-types are lacking in; most particularly those with a legal education. Somewhat deflatingly, the authors report it is an “open question” as to whether companies will succeed in making hires with the requisite social skills going forward. They write, “The answer will depend in part on whether they can figure out how to effectively evaluate the social skills of job candidates, and whether they decide to make the cultivation of social skills an integral component of their talent-management strategies.”
But the business reality is that companies must do so to remain competitive. Talent acquisition and retention will be one of the most important keys for businesses to survive and thrive into the 2030s and beyond. Developing internal talent with these skills would clearly be the optimum approach for an organization to take. The authors also believe that companies should encourage law and business schools “to place more emphasis on social skills in their MBA and executive-level curricula, and they should challenge search firms and other intermediaries to devise innovative mechanisms for identifying and assessing candidates.”
But this is beyond simply internal development of the top candidates from law and business schools. When “recruiting and evaluating outside talent, they must prioritize social skills. The same is true when it comes to measuring the performance of current [CCOs] and setting their compensation. In addition, firms should make strong social skills a criterion for promotion, and they should task supervisors with nurturing such skills in high-potential subordinates.”
As much as the compliance profession has evolved over the past 10 years, this evolution will only continue with greater speed going forward. Simply consider how much business has changed forever since the Russian invasion of Ukraine and you can begin to see why a CCO, and compliance professional, will need a much wider variety of social skills. Change in the way Supply Chain risk will be managed; how trade and economic sanctions will play a more strategic role in each organization, anti-corruption detection, prevention and enforcement has now become a national security issue of the United States, cybersecurity and data privacy are on the front plate of every organization and environmental, social and governance (ESG) will lead many corporate efforts going forward.
The bottom line is that the business world has changed and not only must CCOs change with it but the manner in which companies acquire and retain compliance talent must change as well.
Tag: CCO
What skills will be needed for the mid-century Chief Compliance Officer (CCO) [yes just a few more years to 2030 and ‘mid-century’]. Moving into the CCO chair today is far beyond compliance expertise and legal knowledge. What CCOs need even more as we move into 2030 and beyond are strong social skills. Compliance is becoming more complex and tech-centered; workforce diversity is growing; and firms face greater public scrutiny than ever before. These requirements are far beyond a Foreign Corrupt Practices Act (FCPA) or even compliance course in law school. Going forward, CCOs will need to be adept communicators, relationship builders, and people-oriented problem solvers. To succeed in the future, companies will need to focus on those skills when they evaluate CCO candidates and develop in-house talent in their compliance function. In a recent Harvard Business Review article (HBR), entitled “The C-Suite Skills That Matter Most”, authors Raffaella Sadun, Joseph Fuller, Stephen Hansen, and PJ Neal looked at this issue in the context of the Chief Executive Officer (CEO) position. I have adapted their work for the CCO role.
Previously, companies could look for good technical skills in a CCO. But today, companies need to seek out and hire CCOs “who are able to motivate diverse, technologically savvy, and global workforces; who can play the role of corporate statesperson, dealing effectively with constituents ranging from sovereign governments to influential NGOs; and who can rapidly and effectively apply their skills in a new company, in what may be an unfamiliar industry, and often with other colleagues in the C-suite whom they didn’t previously know.” Getting it wrong can be a disaster for the company. Witness the train wreck involving the Activision Blizzard, Inc. CCO, when that company’s scandal broke.
Previously, the CCO had to use influence to try and get compliance accomplished in an organization. In the early part of the past decade, Jenny O’Brien talked about about techniques for a CCO to employ to help influence decision-making within an organization.
- Understand the products and services that your company offers but also the challenges that your business development team will face out in the world.
- Active Listening. Work constantly at active listening, which is listening, thinking and then speaking.
- Connections with other functions in an organization.
- The CCO does not need center stage.
- Make a win look like a win for everyone.
- The Triple ‘C’- Calm, cool and collected. Don’t let them see you sweat.
- Know your stuff.
However, the authors demonstrate that these soft skills are no longer enough for a CCO, even one with high technical competence in compliance programs. A critical first step is to develop greater clarity about what it now takes for a CCO to succeed as the range of necessary skills appears to have expanded. This is more than the ‘soft-skills’ approach articulated by O’Brien but more ‘social skills,’ “including a high level of self-awareness, the ability to listen and communicate well, a facility for working with different types of people and groups, and what psychologists call “theory of mind”—the capacity to infer how others are thinking and feeling.”
By looking at the reasons for these changes, the authors identify several areas that CCOs previously were not required to understand but are now mandatory for a mid-21st century compliance program.The focus on social skills is especially evident in large companies. This is even more true “at publicly listed multinational enterprises and those that are involved in mergers and acquisitions. These patterns are consistent with the view that in larger and more complex organizations, top managers are increasingly expected to coordinate disparate and specialized knowledge, match the organization’s problems with people who can solve them, and effectively orchestrate internal communication. For all those tasks, it helps to be able to interact well with others. It also reflects the web of critical relationships that leaders at such firms must cultivate and maintain with outside constituencies.” This of course includes the five sets of stakeholders identified in the Business Roundtable’s Statement on the Purpose of a Corporation. Again this reality is even considered in the 2013 COSO Internal Control-Integrated Framework.
There is no bigger change to the skill set of the CCO than around information and information-technology systems, i.e., data and data analytics. The authors cited to Peter Drucker for the following, “The more we automate information-handling, the more we will have to create opportunities for effective communication.” This means the CCOs and corporate compliance programs which “rely significantly on information-processing technologies today also tend to be those that need leaders with especially strong social skills.”
In compliance, when companies automate routine compliance tasks, “their competitiveness hinges on capabilities that computer systems simply don’t have—things such as judgment, creativity, and perception. In technologically intensive firms, where automation is widespread, leaders have to align a heterogeneous workforce, respond to unexpected events, and manage conflict in the decision-making process, all of which are best done by managers with strong social skills.” The authors conclude, “as more tasks are entrusted to technology, [CCOs] with superior social skills will be in demand at all levels and will command a premium in the labor market.”
Another new area is in social media and networking technologies. As companies move away from shareholder primacy and focus more broadly on stakeholder capitalism, as outlined in the Statement on the Purpose of a Corporation, CCOs will be expected to be public figures. They will meet and “interact with an increasingly broad range of internal and external constituencies but to do so personally and transparently and accountably.” Moreover, CCOs, and other corporate officers, will be required to operate in “real time, thanks to the increasing prevalence of both social media (which can capture and publicize missteps nearly instantaneously) and network platforms such as Slack and Glassdoor (which allow employees to widely disseminate information and opinions about their colleagues and bosses).” CCOs will be required to “be constantly attuned to how their decisions are perceived by various audiences. Failing to achieve their intended purposes with even a handful of employees or other constituents can be damaging.”
Join us tomorrow where we consider the way forward for the CCO role at mid-century.
The Compliance Life details the journey to and in the role of a Chief Compliance Officer. How does one come to sit in the CCO chair? What skills does a CCO need to navigate the compliance waters in any company successfully? What are some of the top challenges CCOs have faced, and how did they meet them? These questions and many others will be explored in this new podcast series. Over four episodes each month on The Compliance Life, I visit with one current or former CCO to explore their journey to the CCO chair. This month, my guest is Joe Burke, most recently the Chief Ethics & Compliance Officer and Employment Counsel, Quest Software Inc.
From Kentucky Fried Chicken in Louisville, Joe moved to Round Rock, TX, to work at Dell Inc. He began in Federal Government Sales, where he developed a compliance program for GSA and TAA work for Dell Federal. He moved into compliance with the “big switch” from commercial legal to Chief Compliance Counsel. In this role, he was instrumental in building a new FCPA program using the Federal Sentencing Guidelines as a guideline.
Resources
Joe Burke LinkedIn Profile
Matt Kelly once challenged me to write a blog post for Bloomsday. Well aware of my great love for Joyce’s magnum opus, I accepted the challenge. This year is the 100th anniversary of the publication of the book. To celebrate this event, James Joyce’s novel at 100 and the compliance profession, I have decided to do a 5-part podcast series on Ulysses. Over this podcast series, I will highlight some of the books and commentary and tie what Joyce, Dublin, Leopold Bloom and his wife Molly, together with his mentor Stephen Daedalus, can teach the modern compliance professional. I hope you will join me in the short celebration and trip through Dublin 1904 for the 100th anniversary of Bloomsday. In Part 5, Bloomsday and storytelling.
Resources
The Teaching Compliance-James Joyce Ulysses, by James Heffernan
The Politicians Who Love Ulysses by Kevin Dettmar
“Ulysses” and the Moral Right to Pleasure by Dan Chiasson in the New Yorker
The Moral of Ulysses by Charles Cosby
Ethics and the Modernist Subject in James Joyce’s “Ulysses,” Virginia Woolf’s “The Waves,” and Djuna Barnes’s “Nightwood” by AnnKatrin Jonsson
The Ethical Reader in Ulysses by Stephen Gilbert
Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley.
Adam Balfour is known as a “GGIC” – a great guy in compliance, and he is also Vice President and General Counsel for Corporate Compliance and Vice President for Global Risk Management at Bridgestone America. Initially from Scotland, Adam has supported diversity throughout his career and recognizes the importance of different viewpoints as part of analyzing risk.
Adam has become known for a number of things, including his “Sunday Morning Compliance Tip,” which is on LinkedIn every week and is now being published by Corporate Compliance Insights. Lisa and Adam talk about how this passion project has grown and how a community has evolved around it. They also discuss how projects like these can enhance your professional career as well as the opportunities they can provide for people to build their networks and experiences.
Another thing Adam is known for is the philosophy of “ethics and compliance for humans,” and he explains this idea and how it applies to how he builds a program. He is also a strong advocate for women, a dad to 3 girls and one son, so he shares his advice with them.
The Great Women in Compliance Podcast is on the Compliance Podcast Network with a selection of other Compliance-related offerings to listen to. If you are enjoying this episode, please rate it on your preferred podcast player to help other like-minded Ethics and Compliance professionals find it. You can also find the GWIC podcast on Corporate Compliance Insights, where Lisa and Mary have a landing page with additional information about them and the story of the podcast. Corporate Compliance Insights is a much-appreciated sponsor and supporter of GWIC, including affiliate organization CCI Press publishing the related book; “Sending the Elevator Back Down, What We’ve Learned from Great Women in Compliance” (CCI Press, 2020).
You can subscribe to the Great Women in Compliance podcast on any podcast player by searching for it, and we welcome new subscribers to our podcast.
Join the Great Women in Compliance community on LinkedIn here.
Categories
Compliance Craziness
Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to more fully explore a subject. In this episode, we deep dive into some recent crazy stories involving CCOs, compliance professionals and the compliance function. Highlights include:
· New CCO at Facebook and the results.
· Did Penn State CCO engage in retaliation, discrimination and harassment?
· Is a contract non-renewal retaliation?
Resources
Matt in Radical Compliance
Matt Kelly once challenged me write a blog post for Bloomsday. Well aware of my great love for Joyce’s magnum opus, I accepted the challenge. This year is the 100th anniversary of the publication of the book. To celebrate this event, the author James Joyce and my passion for compliance, I have decided to do a 5-part podcast series on Ulysses. Over this podcast series, I will highlight some of the book and commentary and tie what Joyce, Dublin, Leopold Bloom and his wife Molly, together with his mentor Stephen Daedalus can teach the modern compliance professional. I hope you will join me in the short celebration and trip through Dublin 1904 for the 100th anniversary of Bloomsday. In Part 1, why does Joyce and Ulysses still matter.
Resources
The Teaching Compliance-James Joyce Ulysses, by James Heffernan
The Compliance Life details the journey to and in the role of a Chief Compliance Officer. How does one come to sit in the CCO chair? What are some of the skills a CCO needs to success navigate the compliance waters in any company? What are some of the top challenges CCOs have faced and how did they meet them? These questions and many others will be explored in this new podcast series. Over four episodes each month on The Compliance Life, I visit with one current or former CCO to explore their journey to the CCO chair. This month, my guest is Mark Beyer, the Ethics and Compliance Officer at Pedernales Electric Cooperative.
In this concluding episode, Beyer discusses his move to Pedernales Electric Cooperative, the largest electric distribution cooperative in the US. He moved to the role in no small part because of his love for the Texas Hill Country (much like the host Tom Fox-see The Hill Country Podcast). In addition to moving into the CCO chair, Beyer found the risks in such a non-profit electric cooperative very different than a publicly traded for profit enterprise. Beyer has also continued to expand his Compliance Toolkit while sitting in the CCO chair.
Tool No. 11 was the lesson that the CCO could not, should not and did not do everything in the compliance arena. The ‘who’ of doing it is quite important. The company’s customers are a rural base in the Hill Country of Texas and relationships are very important.
Tool No. 12 was expanding his compliance remit to include privacy. Simply because you are a US centric business, does not mean privacy rights do not exist. While they may not rise to the level of GDPR, they exist even in Texas.
Resources
Mark Beyer LinkedIn Profile
Pedernales Electric Cooperative
In today’s edition of Daily Compliance News:
- JPMorgan shareholders disapprove of CEO pay package. (Reuters)
- Allianz pleads guilty. (NYT)
- DOJ to require CCO certification. (Compliance Week)
- Top Nigerian accountant arrested in $193MM theft. (Bloomberg)
In this episode of the Compliance Week 2022 Preview Podcasts series, Charles will discuss some of his presentation at Compliance Week 2022 “The Current State of Compliance and What’s in Store for the Future”. Some of the issues he will discuss in this podcast and his presentation are:
- The current state of the industry, impacts of COVID-19, and examine the road ahead;
- Steps compliance professionals can take collectively to protect and advance the profession moving forward; and
- Reflections on emerging topics that are top of mind for compliance officers and how leaders are forging ahead.
In this first full compliance conference in over 2 years, I hope you can join me at Compliance Week 2022. This year’s event will be May 16-18 at the JW Marriott in Washington DC. The line-up of this year’s event is simply first rate with some of the top ethics and compliance practitioners around.
Gain insights and make connections at the industry’s premier cross-industry national compliance event offering knowledge-packed, accredited sessions and take-home advice from the most influential leaders in the compliance community. Back for its 17th year, compliance, ethics, legal, and audit professionals will gather safely face-to-face to benchmark best practices and gain the latest tactics and strategies to enhance their compliance programs. and many others to:
- Network with your peers, including C-suite executives, legal professionals, HR leaders and ethics and compliance visionaries.
- Hear from 75+ respected cross-industry practitioners who are CEOs, CCOs, regulators, federal officials, and practitioners to help inform and shape the strategic direction of your enterprise risk management program.
- Hear directly from the two SEC Commissioners and gain insights into the agency’s areas of enforcement and walk away with guidance on how to remain compliant within emerging areas such as ESG disclosure, third-party risk management, cybersecurity, cryptocurrency and more.
- Bring actionable takeaways back to your program from various session types including ESG, Human Trafficking, Board obligations and many others for you to listen, learn and share.
- The goal of Compliance Week is to arm you with information, strategy and tactics to transform your organization and your career by connecting ethics to business performance through process augmentation and data visualization.
I hope you can join me at the event. For information on the event, click here. As an extra benefit to listeners of this podcast, Compliance Week is offering a $200 discount off the registration price. Enter discount code discount code TFLAW $200 OFF.
