How can a board of directors work to incorporate the compliance function into a long-term business strategy of the organization? 

First, a board can identify compliance issues material to your organization. This can be accomplished with compliance-related key performance indicators, which a board should then prioritize to elevate their impact on compliance. A board should consider these through the lifecycle of a business line or geographic sales area. 

Next, the board should move compliance into the long-term strategy for the company and have the CCO detail the long-term strategy for the compliance function. 

Once that is accomplished, a board should actively work to incorporate compliance into the long-term capital allocation of the company. Obviously, the earlier the investment the better as it brings benefits such as brand differentiation, lowering the risk profile of the company and improving nimbleness in market responses. 

The board should oversee the incorporation of KPIs into senior management performance evaluations and compensation and should make sure systems are in place to quantify performance-related compliance issues. And, finally, it should disclose to shareholders the material compliance issues that drive compensation, the specific goals or performance targets that management has to achieve and report on the actual performance against established goals to justify compensation payouts. 

The board should also communicate the influence of compliance factors on overall corporate strategy by demonstrating how compliance is integrated into the business. Not only is this good from a business perspective and shareholder expectation, but it also has the side benefit of appeasing the Justice Department as it evaluates the operationalization of compliance programs going forward.

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