Overreach: A Sure Way to a Compliance Officer’s Demise


Overreach: A Sure Way to a Compliance Officer's Demise by Roy Snell

2014-snell-roy-speaking-headshot-200By Roy Snell

Once in a while, someone suggests or implies that compliance professionals should be involved in executive compensation. It seems to me, that is the Board’s role. Compliance programs are designed to help organizations follow the rule of law and build an ethical culture. We are not supposed to take over the management of the organization. One exception might be that we try to help management find ways to incorporate compliance metrics in the bonus structure. But I can think of few things that will derail a compliance officer and a compliance program faster than overreach. Those that are suggesting compliance professionals get involved in setting executive compensation are overreaching, and are on a path to failure.

I can just see the executive compensation crowd throwing up their hands and saying, “How can you not think executive compensation is important?” I do think executive compensation is important—I just don’t think that everything that is important is the responsibility of the compliance officer. It may be an ethicist’s, governance expert’s, or the corporate social responsibility officer’s job to opine about how those in governance handle executive compensation—but it’s not the compliance officer’s job.

When I was a compliance officer, people would ask me to overreach. One administrator wanted my help justifying the purchase of an expensive piece of medical equipment. They said their purchase was related to a compliance issue. I asked them to tell me the rule of law that we would break if they didn’t buy the equipment. They couldn’t. I said, “Well, come on back when you figure that out and I will help.”

I have the same problem with the Governance, Risk, and Compliance (or GRC) crowd. I understand why vendors use the GRC term because they have products in all three areas. However, compliance professionals don’t govern; and although risk is important, it’s not more important than ethics, audit, legal, or many other elements of a compliance program. Corporate social responsibility (CSR) folks want us to get involved in social and political issues. It’s not just the executive compensation crowd; almost everyone, it seems, wants the compliance officer to get involved in their favorite cause.

Many people are trying to distract us from our role of preventing, finding, and fixing problems and promoting an ethical culture. Isn’t that what happened before the compliance profession was created? Everyone was running up and down the hall with their hair on fire about their favorite cause; but few, if any, were actually preventing, finding, and fixing problems. Isn’t it illogical to allow people to send us back to the way things were done in the past if that way didn’t work? Didn’t the approach of the past result in the problems we have now? Isn’t the reputation of organizations at an all-time low because of regulatory missteps? Penn State University, Enron, WorldCom, VW, etc. were not in compliance with the rule of law. Ethicists say, “Go beyond compliance to ethics.” I will be glad to go beyond compliance— once we stop breaking the rule of law. You cannot possibly have an ethical culture if you are breaking the rule of law. Stop dismissing compliance for ethics and suggesting that compliance officers should just focus on ethics. We need both.

Ethical behavior and an ethical culture are outcomes, not a methodology. Compliance programs are a methodology that can impact outcomes such as behavior and culture. Everything is important, but that doesn’t mean we shouldn’t have at least one person focused on compliance with the rule of law. I support ethicists, CSR, the legal department, and everyone else. I am just asking you to let us get our job done and to stop asking us to overreach, to become distracted, or to do your job.

Do not overreach. Do not listen to those who want you to overreach. Just because something is important doesn’t mean it’s your job. We have millions of people opining—but we have terrifyingly few people actually preventing, finding, and fixing regulatory problems. Stay focused, my friends.

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