The role of the chief compliance officer has steadily grown in stature and prestige over the years. In the 2012 FCPA Guidance, under Hallmark Three of the 10 Hallmarks of an Effective Compliance Program, the focus was articulated by the title of the Hallmark, Oversight, Autonomy, and Resources. In it, the 2012 FCPA Guidance focused on whether the CCO held senior management status and had a direct reporting line to the board. It also advises companies to “consider whether the company devoted adequate staffing and resources to the compliance program given the size, structure, and risk profile of the business.”
This Hallmark was significantly expanded in both the Evaluation of Corporate Compliance Program and the new FCPA Corporate Enforcement Policy. The Department of Justice’s Evaluation of Corporate Compliance Programs made the following query about the CCO position.
There is a new requirement for compliance “independence.” Mike Volkov has said of this change, “The new language includes the addition of “authority” of the compliance function, and the reporting relationship of the compliance function to the board of directors … the term “authority” reinforces the overall trend of maintaining an empowered CCO in corporate governance structures. Additionally, the CCO’s access to the board and regular reporting to the board is emphasized with the new language and reflects increasing concern over the importance of regular reporting by the CCO to the board.”
The Evaluation and the new FCPA Corporate Enforcement Policy build upon the 10 Hallmarks of an Effective Compliance Program and demonstrate the continued evolution in the thinking of the Justice Department around the CCO position and the compliance function. Their articulated inquiries can only strengthen the CCO position specifically and the compliance profession more generally. The more the Justice Department talks about the independence of the CCO position, coupled with resources being made available and authority concomitant with the CCO position, the more corporations will see it is directly in their interest to provide the resources, authority, and gravitas to compliance positions in their organizations.
No comments yet