Executive coach and former Chief Compliance Officer Amii Barnard-Bahn responds to your anonymous questions on some of the grayer areas compliance officers face, such as culture, hiring, training, and ethics. Click here to submit your own for inclusion in our next edition.
Q: I know that compliance works best when it works in conjunction with the business objectives of the company, but it’s one thing to say that and another thing entirely to put it into practice. I find that more times than not the things I end up focusing on are areas in which I am preventing someone from trying to reach a business objective in a way that technically breaks the rules we have in place. These are tough conversations. I don’t really have a question, just wondering how people in my shoes handle these types of things. - Anonymous, from automotive industry
Amii: Breaking tough news to business partners is one of the hardest parts of our job. We don’t like to be the department of “no.” And yet—sometimes this is our job. To monitor, evaluate, and put a stop to some behaviors and practices.
To be treated as a strategic business partner, you need influence. How do you know whether you have the influence you need?
To help evaluate how much influence you currently have in your role, use this simple process to conduct an influence self-audit:
- Write down the top 10 people that help you get your job done.
- For each person, grade them from 1 to 5 on how much you depend on them. If someone is critical to you getting your job done, give them a high score. Think broadly: Include factors such as mentoring, daily work support, moral support, information, and organizational power/authority.
- Then for each person, grade them on a scale of 1 to 5 on how they would rate you on the same factors. How much do they depend on you?
Audit your results. Are there any red flags? For example, are you taking more value than you’re giving to your key network? Is your list diversified, or is it overly concentrated in one department, geographic location, or team?
Based on your results, consider whether you need to improve your scores. The No. 1 way to improve your scores is to deliver value to your stakeholders. Think about their needs and how you can help them achieve their objectives. Build alliances before you need them. This usually involves increasing the frequency of your contacts so that you get information that enables you to be helpful to them.
Next, get to know the agendas of your key stakeholders. They are under business pressure just as you are and, if you know what is important to them and can help them in one area, things will go a lot better with your conversation when you need to put the brakes on in a different area.
Q: I work for a small company with a compliance staff of one, and we’ve been advised to outsource compliance altogether instead of investing in additional staff. In your view, what are the benefits and drawbacks of outsourcing the compliance function? - Dawn
Amii: The outsourcing of compliance functions to a third party, in whole or in part, is commonly considered by organizations of all sizes—driven by operational costs, talent shortages, and other complex global compliance needs. Small companies may lean toward outsourcing compliance in its entirety, with the hope of getting a higher quality program at a better value.
It’s possible for a small company to identify a compliance partner that specializes in its business model, regulatory landscape, has sophisticated compliance technology capability for automation, and possesses specialized talent that would be cost prohibitive for small companies to maintain in-house.
Outsourcing the entire compliance function, however, can create a gap between corporate behavior and accountability. A company cannot delegate compliance program design and oversight, disciplinary enforcement, or accountability for its effective implementation. The company is ultimately liable for any compliance issues that occur due to mistakes made by your third-party provider—so your organization must still manage and implement effective monitoring controls to oversee any third party. The Securities and Exchange Commission has scrutinized compliance outsourcing in several cases and cautioned companies on the risks and liabilities associated with outsourced arrangements.
Most companies adopt selective outsourcing—where certain compliance functions, but not all, are outsourced. These commonly include sanctions screening (high volume and easy to standardize), anonymous helpline reporting (available 24/7 and inspires employee confidence in anonymity), high-risk misconduct investigations (to maintain privilege and manage potential conflicts of interest), and training (requires specialized talent and technology).
There is no one-size-fits-all solution, so evaluate your options to come up with the right structure that matches the risk appetite of your company. Make sure your leadership team and the board of directors understand that regardless of who they hire, they are ultimately responsible for the effective functioning of compliance.
For more, see Joe Mont’s take on this topic from earlier this year.
Q: I’m looking to make a jump out of finance and into a different industry (but remaining in a compliance function). I work for a hedge fund now, so a lot of my duties now require my background in law … but I’m not sure that’s the skill set I want to stress when I start reaching out for other positions. What’s the best way for me to “sell” my skills without stressing my legal background? - Anonymous
Amii: You’re wise to think about your job search strategy for a career pivot. Recruiters scan résumés very quickly (usually less than a minute), so you need to “present” as a potential match for their job opening right off the bat in order to make it through the screening process to an interview. To do this, you will likely need multiple versions of your résumé.
If the job you want is in another highly regulated industry, leverage your legal background as an asset. Position that your legal training enables you to quickly get up to speed in the new areas of law, and beef up your knowledge of that industry’s regulatory framework and common and recent industry compliance issues prior to the interview.
When moving to a less-regulated industry, you will want to distance yourself more from your legal experience. Less-regulated companies are going to seek a culture fit and may question whether you can be effective in a role that doesn’t rely as heavily on legal mandates to drive ethical behavior. Think about the relevant assets you bring to your target company. What projects have you managed? What culture shifts have you led? How do you inspire and motivate employees to do the right thing?
Shifting industries is not impossible by any means. Make it easy for recruiters to see you as capable of translating your skill set to their needs and it will help you find the next step in your compliance career.