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Separation Conundrum: Should Compliance Be Independent of Legal?

Joe Mont | November 11, 2014

The push to divorce compliance from the legal department is nothing new. For several years, regulators—from the Department of Justice to Health and Human Services—have advised and even mandated autonomy for the compliance department.

The Federal Sentencing Guidelines also stress the importance of independence for the compliance function. Some are now arguing, however, that one structure doesn’t fit all, and that the compliance department can still be independent even while it resides inside the legal department.

The crux of the argument for cleaving the functions is that while legal has the job of protecting the firm, the role of compliance must always be free of potential conflicts of interest as it works to prevent and detect violations.

But is separating them a move that should be made universally? While it is hard to imagine objections to ensuring that compliance officers have adequate authority and resources, there is nevertheless backlash against blanket...

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