In the aftermath of changes to the U.S. Sentencing Guidelines and in the face of an unforgiving regulatory environment, more companies increasingly see the sense in splitting the compliance officer and general counsel jobs.

According to a recent survey, Compliance and Ethics Program Environment Report, conducted by the Society of Corporate Compliance and Ethics and NYSE Governance Services, 56 percent of 249 compliance and ethics professionals polled said the person with overall responsibility for the compliance and ethics program holds the job title of compliance and ethics officer. Only 8 percent of respondents said overall responsibility for the compliance and ethics program was assigned to the general counsel or chief legal officer.

The report further established a distinction between individuals who have overall responsibility for the compliance and ethics program versus those with “day-to-day” responsibility. In this aspect, 67 percent of respondents said the same person assigned overall responsibility for the compliance and ethics function also has day-to-day responsibility, while 33 percent said the roles are held by different individuals.

The plurality of respondents (35 percent) said the most common job title for the person with day-to-day operational responsibility for the compliance and ethics program is “director,” followed by “compliance and ethics officer" (18 percent), and “manager” (12 percent).

Reporting Structures

Most often, the person with overall responsibility for the program reports to the chief executive (38 percent), followed by the board (19 percent), while 18 percent report to the general counsel or chief legal officer, according to the report.

In companies where the person with day-to-day operational responsibility for the compliance and ethics program doesn’t have overall responsibility for the program, 31 percent of respondents indicated that the day-to-day person reports to the chief compliance and ethics officer, followed by the general counsel or chief legal officer (21 percent).

The report also revealed that 78 percent of individuals with overall responsibility for the compliance program have a dotted reporting line to the board, compared to 36 percent of those with day-to-day responsibility. Additionally, most individuals with overall responsibility report to the board at least quarterly, whereas those with day-to-day responsibility typically report to the board either on an ad hoc basis, or not at all.

Most respondents (68 percent) to the survey said their organizations maintain a compliance and ethics committee, and that this committee most commonly is chaired by the chief compliance and ethics officer, cited by 41 percent of respondents.

This internal compliance committee most often reports its findings and recommendations to the full board (39 percent); the audit committee (38 percent); a senior-level executive (26 percent); or the chief compliance and ethics officer (20 percent).

Overall, the findings highlight that views have changed substantially over the past few years. Whereas many general counsels have traditionally served the dual role as the company's chief compliance officer, that’s less often the case today. Now, most companies, especially those in highly regulated industries, see the value in separating the chief compliance officer role—or even the entire function—from legal.  

Access the full report here.

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