The Renaissance of the Chief Compliance Officer: An Artist and a Scientist

Carol BeaumierBy Carol Beaumier, Executive Vice President and Managing Director
Protiviti’s Regulatory Compliance Practice

 

 

The Renaissance man, in the traditional sense, was adept in many different fields. Think Leonardo Da Vinci – a painter, sculptor, architect, scientist, musician, mathematician, engineer, inventor and anatomist. Fast forward to today’s financial services world, and the Renaissance man is enjoying a rebirth in an unlikely place – the risk and compliance industry. It is not every day that compliance managers are compared to Renaissance men, but if you read Protiviti’s newest publication, The Art & Science of Compliance, you will understand why today’s chief compliance officer (CCO) is to be perceived as exactly that.

For one, the modern CCO needs to be a highly learned and skilled performer – an artist and a scientist – who interprets and is able to understand and comply with myriad technical requirements of laws and regulations – the science of compliance. This artist also needs to be a visionary, peering forward into risks that haven’t yet fully emerged, and engaging in a top-level discourse with the board and management to help steer the organization in the right direction.

Long gone are the days when CCOs were primarily responsible for writing compliance policies and procedures. The role of the compliance officer is expanding rapidly, and this has broadened the range of skills required to become an effective head of compliance. Robust risk management capabilities and technological know-how are essential skills,  but the modern CCO also needs to be proficient at developing and maintaining strong relationships with internal and external stakeholders – relationships as vital as those between Renaissance artists and their sponsors. No compliance officer can practice his or her art successfully without this support.

I highly recommend you read the publication for yourself, but here are the trends surrounding the role of the new, “Renaissance CCO” I find the most interesting:

  • Increased oversight with more than a hint of acumen
    • Compliance requirements and supervisory scrutiny have surged, especially in the area of consumer protection. Compliance officers are increasingly being asked to look beyond technical compliance with new rules to address more broadly whether acts or practices are unfair, deceptive or abusive.
    • Compliance officers are also expected to be aware of Bring Your Own Device (BYOD) policies and employees’ use of social media and keep an eye on the new privacy and consumer protection risks that stem from these activities.
  • Technological involvement and know-how
    • The many recent regulatory changes are placing a burden on legacy systems and necessitating technological upgrades. As a result, compliance officers are increasingly involved in the technology change process to ensure that all legal and regulatory risks are addressed.
  • A seat at the leadership table
    • Regulators are demanding that compliance be managed as part of an integrated risk management framework – independent of the business and with clear access to senior management and the board of directors. This requires compliance officers to embrace a more visible and vocal role at the top of the organization.
  • Doing a lot more with less
    • Compliance officers are expected to cover a much broader set of compliance requirements than before with the same, or fewer, technological and personnel resources. CCOs with the skills and competence to handle this mounting pressure are in short supply, and firms are competing heavily for talented individuals to join their compliance functions.

Ultimately, the CCO’s job has become that of a compliance spokesperson and critical decision-maker who occupies an important seat at the leadership table. Getting that seat requires modern CCOs to become true, versatile, resourceful and outspoken masters in the art and the science of 21st century compliance.

I am interested in your thoughts on this topic. You can access the Art & Science of Compliance Spring issue here. While there, I also recommend the in-depth discussion with Chetan Shah, a director in our Charlotte, NC office, on AML transaction monitoring – a necessary, but often ineffective, component of an AML compliance program, and the highlights section which in this issue sheds light on consolidated mortgage origination disclosures as well as debt collection.

One thought on “The Renaissance of the Chief Compliance Officer: An Artist and a Scientist

  1. Pingback: 2015 Wrap-up: It’s Been a Great Year, Thanks to You | The Protiviti View

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