Firefighter. Astronaut. Chief compliance officer.
One of those jobs will never make its way onto a dreaming child's list of what to be when they grow up. Nor is it, at least for now, a chosen path for most young men and women entering the job market. In fact, many of the folks who earn their living in compliance didn't choose the profession—it chose them.
The career track for chief compliance officers is rarely a straight line from junior compliance professional to CCO. Most were either drafted into the position out of need—during a time of crisis, for example—or found themselves morphed into the role, as compliance duties slowly piled up on their plate.
“Among my peers in the chief compliance role, I'd bet it is a pretty small minority who, when they were coming out of college, set out to be a compliance officer,” says Mark Koczela, vice president of compliance at Johnson Controls. He too was “thrust into the position.”
After graduating law school in the 1980s, Koczela began his career in corporate law, specializing in mergers and acquisitions. About 12 years ago, he joined Johnson Controls as general counsel.
It was revealed that a company acquired by Johnson Controls in 2005, York International, was caught in the middle of the infamous Oil-for-Food Program. Established by the United Nations to allow Hussein-era Iraq to bypass sanctions and sell oil in exchange for food and medicine, that effort was rife with financial improprieties and violations of the Foreign Corrupt Practices Act. York escaped charges for FCPA violations by signing a deferred prosecution agreement with the Department of Justice.
“I was baptized by fire," says Koczela, who was general counsel for Johnson Controls' Building Efficiency business unit at the time York became part of the company.
Once the deferred prosecution agreement ended in 2010, company leadership asked him to head up Johnson Control's compliance function full time. They wanted Koczela to build on a company-wide compliance program he had started that already went well beyond anti-corruption measures.
Koczela says this sort of career path is hardly unusual. “People tend to have a parallel process where they were pegged to get into the compliance role at around the same time the company established one,” he says.
“Most people don't get out of college and say, ‘hey this is what I want to do for a living,'” says Brad Siciliano, a shareholder in Littler Mendelson's New York office and a member of its compliance practice. “It is sort of an evolution; it gets dumped on them for lack of having someone else with the abilities or willingness to do it. Then, at a certain point, they say, ‘This is pretty interesting.'”
Siciliano, a former compliance officer stand-in, was also “pulled into it by accident.”
In 2006, shortly after he began a general counsel position at Sharp Electronics, there was “a series of problematic events,” that exposed the company's lack of a compliance program and related training for employees. “We really had next to nothing,” he says.
“Over the next six years, more and more of my job became compliance,” Siciliano says. “I served on the compliance committee and headed all major investigations. I built the compliance program.”
Eventually, a member of Sharp's finance group was named to head compliance efforts. Siciliano continued to be involved, however, coming to the surprising realization that he had found a career alternative he wanted to pursue. He soon made the move to Littler's corporate compliance and ethics group to advise companies on the function full time.
“Among my peers in the chief compliance role I'd bet it is a pretty small minority who, when they were coming out of college, set out to be a compliance officer.”
VP of Compliance,
The general counsel's office is a common breeding ground for future CCOs. Mark Nielsen, associate general counsel and chief compliance officer for Praxair, the largest industrial gases company in North and South America, draws upon his legal training—in both private-practice and as an in-house attorney. Prior to joining the company, he was a vice president and assistant general counsel at Raytheon, where he developed a specialty in corporate governance and Security and Exchange Commission reporting.
His former life in politics has also served him well in the compliance profession. He served as chief legal counsel and chief of staff for Mitt Romney during his tenure as governor of Massachusetts. Earlier, from 1993-1999, he was an elected member of the Connecticut State Legislature.
“That background in the political world has probably given me a keen sensitivity to reputational issues,” he says. “Experience in government gives you a better ability to imagine what the concerns, objections, and objectives of a regulator might be. A good compliance officer is someone who is forward-leaning, constantly venturing out to talk to people on the front lines, and trying to figure out what the concerns are. You can't just sit in your office and wait for the phone to ring.”
Some future CCOs start out at the regulatory bodies they must later answer to, since companies love to hire compliance officers who have a good understanding of what's on the other side of the fence. For example, Kirk Stephens began his career as federal bank examiner for the Federal Deposit Insurance Corp., and later served as a case manager, directing risk-management examinations.
Last month, he made the leap into the private sector as senior vice president and compliance officer for OSC, a specialist in insurance and risk-management services and products. “I knew I wanted to use my regulatory experience at some point in private industry,” Stephens says. “I wasn't sure how, or when, but I knew at some point I wanted to do that.”
The OSC opportunity intrigued him because it offered “more freedom and flexibility than the very tight, political, stringent rules within a regulatory agency.” For its part, the company was seeking someone with regulatory experience and gaining an insider's perspective was ideal.
William Brown's path to being chief compliance officer for the Knights of Columbus travelled through battlefields and courtrooms.
Beginning in 1992, he served as judge advocate in the U.S. Marine Corps. In 2005, he was deployed to Iraq and commanded a detachment of Marines. A colonel in the U.S. Marine Corps Reserve, Brown went on to serve as both an assistant U.S. attorney and assistant attorney general in Connecticut.
The dual life of soldier and prosecutor equipped him for life as a compliance officer, when he was approached in 2010 about helping the Knights of Columbus take their compliance program “to the next level.” In the military, living by a code of ethics and adherence to rules can be a life or death necessity. In the courtroom, he saw firsthand the dangers of not conducting business that same way.
“I saw what a bad compliance program looks like and what can happen when there is a weak ethical culture within an organization,” he says. “When the opportunity came at the Knights, I knew I had a lot to learn, but I had a foundation upon which to build from my experiences.”
A Growing Profession
As more companies initiate a compliance function and others expand the one they already have in place, there's no doubt that the compliance profession is growing. The Labor Department expects that the number of compliance jobs will jump at least 15 percent by 2020. Legislation, such as the Sarbanes-Oxley Act 10 years ago and the more recent Dodd-Frank Act, not to mention a flurry of other regulatory activity, has forced companies to focus more attention on compliance issues.
CULTURE OF COMPLIANCE
Below is an excerpt from Littler Mendelson's 2012 executive employer survey regarding executives' perceptions on compliance.
In June, Littler Mendelson, the nation's largest employment and labor law firm representing management, released its 2012 Executive Employer Survey. The survey, completed by 957 in-house counsel, human resources and C-suite executives, many from the nation's largest employers, analyzed the key issues impacting employers as the 2012 presidential election rapidly approaches and the economy continues to slowly improve.
As legislative and enforcement trends continue to suggest, companies cannot afford to ignore the need for sound ethics and compliance programs. The survey revealed several interesting findings related to executives' perceptions on compliance.
A majority of respondents (52 percent) believe that companies view compliance as important but do not devote adequate resources to it, while 34 percent feel companies have made compliance a priority and have realized the impact of ethical business practices on the bottom line.
Respondents from highly-regulated industries (energy, financial services/banking and healthcare) were more likely to say that their companies' commitment to a culture of compliance is genuine, while respondents from the nonprofit and professional services sectors were more likely to say that such commitments are purely lip service.
Recognizing the importance of preventing employee misconduct, companies are planning to conduct training in the next 12 months in a variety of high-risk areas that can impact the company's bottom-line, including employee discrimination and harassment (84 percent), workplace safety (68 percent), encouraging employees to report misconduct internally (65 percent) and wage and hour requirements (51 percent).
Source: Littler Mendelson.
That focus is only expected to intensify in the future. So, where will the compliance officers of tomorrow come from? Will it someday be a career that is sought out, not pushed upon?
Schools are still gearing up to meet the growing demand. But while related courses continually pop up at colleges, there is not yet a specific major at most college or business schools.
Nitish Singh, associate professor at the Boeing Institute of International Business at Saint Louis University, says compliance education may be lacking, in part, because so many people enter the field “out of happenstance.”
In response, St Louis University has launched a Certificate in Ethics and Compliance Management program with more than 130 hours of online training over eight months. Singh hopes to fill the need for “cross-industry training” and a broad-based, rigorous program.
“The industry should demand such qualifications and training,” he says. “Having well-trained compliance professionals will greatly mitigate their compliance risk.”
Siciliano, however, doesn't expect to see companies hiring compliance personnel right out of college any time soon. Instead, a premium will be placed on skill sets developed in the workplace. Those interested in the field should try to crack into it through legal, human resources, finance, or audit departments, he suggests.
Koczela recommends that legal-minded job seekers seek a general counsel role, as opposed to narrow specializations. Those who specialize in litigation, for example, often end up in the “investigative branch of compliance and have a little more of a black and white view than is helpful.”
“In the chief compliance officer role you need to be able to see the shades of gray in the company and help counsel the business through those issues without just taking a draconian interpretation of things,” he says.
Given the multifaceted demands placed on a compliance officer—legal, auditing, accounting, human resources, and IT among them—does the ideal job candidate need to be something of a Renaissance man or woman?
“Or a diplomat,” Siciliano suggests.