As you know from our previous blog post, one of the first steps you must carry out to set up an effective, speedy and responsible compliance function within your firm is to hire and designate a Chief Compliance Officer (CCO).
Most of the times, a company’s performance and overall success is established from the top.
If your CCO is a slacker who will cut corners and react instead of attack risk and its many permutations, then this does not bode well for your firm’s handling of its regulatory obligations.
So whom you pick and empower to lead your company’s compliance department and their main traits as professionals and citizens is key when going about this task.
This issue then certainly begs the question: What are the main traits of a dedicated, responsible, ethical and productive CCO?
Below we list our favorite, if not the most important, ones!
Natural Born Leader
As we mentioned earlier, how effectively a compliance function performs is determined by who is at its helm.
A suitable CCO needs to be a leader and impart his knowledge, vision, objectives and modus operandi from the top down to all members of the compliance department and beyond.
This person must set the tone (and a strong example) from the get-go, empowering staff members to perform at a high level, helping them navigate tricky scenarios and commending them for a job well done.
A big part of this boils down to the CCO’s ability to interact and communicate with others, so being a people’s person is generally seen as a redeeming quality of someone in this position.
However, as pointed out by the Houston Chronicle’s Anna Windermere, “people-pleasing cannot take precedence over quality and proper protocol.”
Hence, keeping a balanced perspective on compliance and how to deal with it is always crucial.
Clear & Concise Communicator
Your CCO might be an exceptional and knowledgeable person, but if they cannot communicate properly, then your compliance function will not run as smoothly as you would hope. In a worst-case scenario, you’ll end up getting in trouble with the authorities for failing to live up to your regulatory obligations.
A CCO has to be able to communicate at all imaginable levels.
This might include relaying information to employees, upper management and the Board of Directors or explaining usually complex regulations and reporting obligations in simple and succinct ways.
Furthermore, a CCO should be able to convince staff members that compliance is not a hindrance but a necessary step to complete to guarantee the company’s overall growth and success.
Likewise, according to our training partner EIMF, people holding this unique position should also “be terrific listeners so that they can hear and understand the many pressure points between the business and the law.”
Equipped with a Strong Moral Compass
Integrity might be the most important trait a CCO needs to have.
RiskScreen, a company that develops AML tools, ran a KYC360 survey in October 2020 on what it takes to be a good CCO and integrity topped the list with 59 percent of respondents reporting it as important.
According to RiskScreen, “regulation management process can only be implemented and achieved effectively if the officers have strong moral principles and honest qualities.”
This includes “having the courage of your convictions,” “the confidence to speak out,” “the determination to see things through,” and “developing a ‘thick skin.’”
If your CCO is a conniving scoundrel, you’re bound to face the wrath of the authorities at some point in time and potentially lose the trust of those employees working in compliance.
Willing to Dive into the Nitty-Gritty
An ability to deal with minutiae and the nitty-gritty of regulatory compliance and its many laws is another necessary trait of any strong CCO.
As explained by the Houston Chronicle, “attention to detail helps compliance officers notice potential problem areas and report them to the proper supervisors so they can be corrected” before it is way too late.
Additionally, in its October 2020 survey, RiskScreen’s KYC360 notes that a detailed-oriented nature is imperative because “requirements may be different between jurisdictions; screening tools may have differences in the parameters they apply, [and]; suspicious entities may operate under multiple aliases,” making “a good eye for detail” something invaluable regardless of “whether it’s the technology, the data, or the law.”
This focus on detail, however, does not mean CCOs should ignore the big picture and how compliance fits in with the company’s overall mission and objectives.
Precognition is Their Middle Name
A reactive CCO is bound to fail. Or at least consistently collect slaps on the wrist or fines from the regulatory authorities for failing to comply and trying to correct course one step too late.
Hence, being proactive is crucial to the professional life of a CCO.
According to Robert Walters, a global recruitment firm, CCOs must have “a honed alertness and vigilance to potential breaches in compliance,” which “means actively enforcing a mandatory reporting policy and seeking out any weakness in company dealings.”
A solid CCO will always be one step ahead of the game, ready to respond to risk or compliance breaches before they are even close to happening.
Taking a cue from the sci-fi world, CCOs should be highly adept at precognition.
Solve Problems with Their Eyes Closed
At the pace new regulations are popping up or metamorphosing these days, an effective CCO will also have to moonlight as a dedicated problem solver.
Interpreting the ever-shifting laws and finding new and creative solutions to fall in line with them will be one of the CCO’s top priorities.
As explained by Skillcast, a company that develops training, assessment and reporting solutions for the compliance world, a CCO has “to be able to look at [problems] from all angles and advise on the most appropriate form of action,” often “[going] beyond just saying ‘yes’ or ‘no’.”
Skillcast adds: “Wherever there is an alternative approach that would remove the risk of regulatory investigation, you need to be committed to finding it.”
Are there any other characteristics we may have inadvertently omitted? The comments section has been lonely these days, so show it some love and let us know.
If you have any questions or comments, do not hesitate to reach us at firstname.lastname@example.org. We’d be happy to help.