What if the Compliance Department is Run Like A Legal Department?

By Roy Snell

I was asked what to do if the compliance department was performing as the in house counsel rather than a compliance department. This was my answer…

Leaders need to work with the in-house counsel and the compliance team to clarify and delineate their roles. Once that is accomplished, if the compliance officer is still running a legal department and not a compliance department, they need to be replaced. This is really not a matter of tactics or strategy. It’s not complicated. The answer is to just get it done. Whomever the two departments report to, is responsible and quite often the only people that can fix it. 

If leadership is open to learning and just doesn’t really understand the difference between the two departments, they should consider attending a compliance conference. They will learn from many people through many different presentations… that there is a material difference between the two departments.   I would also consider hiring an outside consultant to help… but leadership has to understand and believe in the direction they need to go which might only come through education. The function of the compliance program and the role of the compliance and ethics department is a new concept. If ever there was a case for an experienced leader to go back and get some education to keep up with the changing times… this is it.  A lot is at stake… just ask John Stumpf.

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  1. If the Corporate Compliance Officer is an attorney and trying to fulfill the role of both in house counsel and CCO, the legal department and compliance department end up being the same department even when the CCO tries to separate the duties.

    Some companies are not large enough to justify having separate In house counsel and CCO. Is there any type of regulation, rule, or guidance that addresses this issue? That would be helpful in getting buy in from leadership to work on restructuring.

  2. We have worked very hard to ensure the separation of the two departments. From reporting to knowing when to send people to the other department. If Compliance Officers know and understand the 7 elements and also have spent time reading about effective compliance programs as well as reading the new CP guidance that has come out, it will keep the Compliance Department aimed where it should. The GC does not know or get involved with 95% of what I do and visa versa. We cross paths and work together if legal counsel is needed or if the GC feels what has landed on their desk is more of a compliance related item. We work together at time but our goals and responsibilities are different. And they do check to ensure our program is running effectively. I do not make legal decisions or give such guidance. I work to ensure that we maintain a culture of compliance, train to ensure employees understand what being compliance means, instigate, monitor and audit for compliance related risks and report such.

    Though 9 years old, this is still a great article


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