Compliance Officers Getting More Respect Than Resources

Catherine Dunn

Corporate Counsel

12-12-2012

Chief compliance officers may have the CEO's ear, but many say what they don't have is adequate resources for their departments, according to a new survey.

The results of the "2012 Chief Compliance Officer Data Survey [PDF]" are based on 48 responses from attendees at Consero's October 2012 Corporate Compliance and Ethics Forum, held in Palm Beach Gardens, Fla. The survey found that "a significant majority of chief compliance officers believe that they have sufficient access not only to the CEO but to the corporate board of directors."

The report also takes a positive view of the data on CCO compensation. The average respondent makes over $200,000 a year; the majority — 54 percent — said they earn between $200,000 and $250,000 annually.

"While there are certainly other factors that demonstrate the value that a corporation attributes to its chief compliance officer, it is worth noting that the chief compliance officers surveyed are a relatively well-compensated group, comparing favorably to other C-level executives," according to the report.

But many survey respondents said they don't get the resources their jobs demand. The survey asked whether respondents have enough resources to manage a compliance program effectively. The answers were split: nearly half — 47 percent — said they don't.

Judging from the discussions at the October forum, says Consero CEO Paul Mandell, "it isn't hard to see that many feel under-resourced."

Fast-paced changes in the regulatory environment — particularly in emerging markets — is a stressor for those charged with keeping the company current and compliant. "As the U.K. and the United States have gone after companies and gotten large penalties, more emerging countries have taken notice," he says. CCOs not only have to stay on top of those developments, but must also address company processes and implement employee training abroad.

Another red flag in the survey: a lack of employee incentives for ethical behavior. "An alarming 55 percent of surveyed respondents indicated that their performance appraisal and incentive programs do not support their compliance and integrity objectives," the report states. "This is an important area where chief compliance officers may wish to direct more of their focus."

In a wobbly global economy, Mandell says companies are under pressure to ensure that "revenue is coming in, and profits are going up." In turn, employees are incentivized so that deals get done. But based on the survey results, says Mandell, "employees are not being incentivized as much they could, it seems, to act in an ethical manner."

That's where CCOs can, and should, work with Human Resources to create a program "that ties ethical performance to success at the company," says Mandell, adding, "The chief compliance officer can't do it on his or her own."