There are three prisms by which the structure of the Chief Compliance Officer position can be evaluated: access, resources, and opportunities. They were originally articulated in the 2012 FCPA Guidance. Since that time, the Justice Department has consistently talked about the structure of the CCO position. In speeches by Justice Department representatives in 2014 and 2015, the structure of the position was discussed. Under the Justice Department FCPA Pilot Program, the CCO structure was specifically called out for evaluation as a part of a best practices compliance program. These comments were carried forward under in the Evaluation of Corporate Compliance Programs, released in February 2017.
What access does your CCO have to the top decision makers in your organization? While it really does not matter whether the CCO reports to the CEO, board or general counsel; the key structural component is that the CCO have direct access to corporate decision maker.
This means both head count of personnel to operate your compliance function and the money available to implement the appropriate technology to sustain an effective compliance program. If your compliance team is run on a shoestring, you will likely be downgraded for your overall commitment to doing business in compliance with the FCPA. Put another way, if you spend more on paper clips than on your compliance program, your compliance program may well be under-funded.
CCO Pay, Opportunity, and Expertise
In the Pilot Program, the Justice Department laid out another important element for every compliance program, which is the expertise of your CCO and compliance function. I think the clear implication is that the Justice Dept. will even look at salaries. Once again if a company tries to get by on the cheap, it may certainly come back to bite them in the end. Finally the DoJ has made clear that compliance is part of the corporate family by even requiring that the CCO have opportunities for advancement with the corporation at the senior management level and that the compliance function shall be afforded similar opportunities.