The Junior Compliance Officer – Making Waves

By James Young LL.M. Dip (GRC) MICA
Head of Compliance at Dr. Martens Airwair

Setting the scene

Regardless of seniority, compliance professionals have the same overarching responsibility – to ensure the business operates within the regulatory framework through the provision of advice, training, monitoring, relationship management to the business and challenge to senior stakeholders. Looking back on the early days of my compliance career, I didn’t know what to expect and I found it very difficult to make any kind of impact in my role. Now a senior member of the profession, my own struggles as a junior led me to start a blog looking at how junior compliance professionals can make an impact at the early stages of their career. Below, I share two of the hot topics of my blog to date – challenging the business and regulatory interpretation/ communication.

The art of challenge

Confronting the business on something that has gone wrong is probably the hardest part of a compliance officer’s role. This is especially true for junior compliance professionals who may be tasked with challenging senior colleagues who have been at the company longer and are more familiar with its operations. It is important to remember that this comes with the territory of a compliance officer’s role. Here are a few thoughts (developed through trial and error) I took forward in the early stages of my career to really make an impact when challenging the business, which have proved to be quite successful.

Reality check – compliance is not the most important function in the business. Fundamentally, the business exists to make a profit and compliance is there to support this goal. A top tip for juniors is to ensure you understand your role in the wider context of the business’s operations and how you are going to add value. I like to think of compliance’s purpose as helping the business safely take the maximum amount of regulatory risk through the development of pragmatic solutions to regulatory issues identified. Don’t fall foul of assuming that compliance is the reason the business remains open!

Create a “win-win” – another very useful tip when engaging the business on compliance requirements is being able to illustrate the benefits of compliance for the employee you’re engaging with, the customer and the business. Think about the efficiencies offered by an effective compliance system and how to frame this to the business. Considering a brief example – I was once tasked with rolling out a uniform procedure across several international offices and was met with strong resistance from an operations manager who oversaw the sites. She saw the roll out as unnecessary and thought that the existing (out of date procedures) did the job but failed to see the increased efficiency in harmonisation in terms of staff training, quality improvement and reduction in key person risk. Framing the roll out in this way aligned our objectives and created a “win win” scenario, and compliance suddenly became a competitive advantage. If you can master this at the junior level, you will really make an impact!

Paving the way – in a previous article published in January’s edition of inCOMPLIANCE, I explored the importance of the compliance function building positive relationships with the business. This is fundamental in ensuring the compliance function is effective, is trusted within the business and is kept informed. For the junior compliance officer, getting out into the business and making yourself known is a key strategy. Talk to people about compliance in the context of their role, and continually reinforce the message that the you, as a compliance professional, are there to help. Company social events can be an excellent way to break down barriers and solidify relationships inside the office.

Everybody’s human – when faced with the adversity of having to challenge the business, it is important to appreciate that everybody is human and is faced with pressures and targets in their own business areas. Taking the time to understand each department, its operations and the challenges of its teams will allow you to be informed when providing challenge, show empathy and gain greater traction on your compliance journey.

Regulatory interpretation

Another fundamental aspect of a compliance officer’s role interpreting regulation and deciding what this means for the business. While an abundance of material is available interpreting regulations for businesses, there is little to none on the methodology behind the process.

Break it down – When looking at regulation, I like to strip it down to the fundamentals and ask the following questions:

• what is the regulation trying to achieve? Having a solid understanding of this will pave the way as you comb through the detail and give you a better understanding of each rule as you analyse it. It will also prepare you for the inevitable question from the business, “why has this regulation been brought in?”.  Personally, I have found exploring the “why” with the business has been a key factor in winning them over.
• Where are the key themes of the regulation? Avoid getting bogged down in the detail, keep in mind the purpose of the regulation, remove the jargon and summarise each provision in general, bitesize terms of no more than three bullet points. Breaking it down in this way will greatly aid your understanding!

Think for yourself – when asking yourself the questions above, the importance of thinking for yourself is vital. Read, digest and critically analyse the primary source (i.e. the actual regulation / statute/ directive etc. text) and come up with your own views about what you think it means for your firm. Only then should you turn to secondary sources (i.e. guidance papers, seminars etc.), which should be used to challenge and solidify your understanding and provide an insight into how other firms in your sector are interpreting the regulations and implementing solutions. I typically read 6-12 secondary sources to get a good picture of what the sector is doing and ensure I am on the right track with my interpretation. It will be very tempting to place reliance on secondary material (there is enough of it out there!). But, this is a short-term gain and adopting this approach will never allow you to truly hone your ability to understand the regulations and become an expert in the field.

Look to the horizon – Horizon scanning is a simple, yet key tool in the successful management of regulatory risk. A key factor in assessing risk is probability. The earlier you identify a piece of regulation that impacts your organisation, the more time you have to understand it and help your business understand it, which equates to less probability that your company will become non-compliant! A top tip that helped me as a junior is to devise a list of key websites that provide you with updates and put them into a document or spreadsheet for regular review. The most important sources can be reviewed and ticked off every morning; the less important/ impactful sources can be reviewed less frequently.

Communicating the requirements

Once you get to grips with what the regulation, how you communicate compliance requirements to the business is crucial.

Consider your audience – The Board is not going to want a three-page roadmap on how the business’ call centre is going to comply with new complaints rules. Equally, the call centre is not going to want (or need) a one-pager on the firm’s overarching strategy. Failing to tailor your regulatory communications to the intended audience doesn’t help anybody and actually increases your firm’s risk of non-compliance as is creates the risk that requirements are misunderstood and applied incorrectly.

Accuracy is key – it may seem simple, but I cannot stress enough the importance of spelling and grammar being accurate when sending compliance communications to the business. The last thing you want is your audience to be distracted by obvious errors when you are attempting to get your message across. Although not the most exciting task, taking the extra time to proofread thoroughly pays dividends. Remember, senior business personnel will take an interest in what compliance has to say and you do not want to get noticed for the wrong reasons (i.e. typos!).

Know your regulator – As compliance professionals, we speak a lot about the importance of “tone from the top”. On the compliance hierarchy, the very top is the regulator, so it is fundamental that you take the time to understand your regulator and its agenda. Start with the regulator’s objectives and understand what they are trying to achieve. Look to speeches and key publications from senior individuals to get to grips with the agenda or “tone from the top”. Understanding this from an early stage of your career will serve you well as you progress.

James Young LL.M. Dip (GRC) MICA is Head of Compliance at Dr Martens Airwair International Limited. Any views expressed are those of the author and not that of Dr Martens.