Name any catastrophic corporate compliance failure and every root cause analysis will show there were silos which compliance could not break through. In the Boeing 737 Max design failure there was the siloed nature of the entire design, creation, training, regulatory and implementation team for the safety feature, the failed Maneuvering Characteristics Augmentation System (MCAS). At Wells Fargo, it was the siloed nature of the commercial banking group from other corporate disciplines such as legal, internal audit, human resources and even the Board of Directors. The over-riding theme was the number of compliance miss-steps that led to these disasters. While the siloed nature of these organizations processes led to a literal number of very small steps which contributed to the final disaster, it demonstrated to me even more clearly why compliance must not only have a seat the table but also be embedded throughout your organization.
Three Key Takeaways:
- Every major corporate scandal involves silos.
- Compliance should rotate senior leadership through its function.
- A CCO must be curious.