Compliance and Ethics Officers Need More Authority

Results of a new study show that there has been an increase in the number of compliance officers hired by companies. Lack of empowerment and inadequate training has led to the number of corporate scandals to remain constant.

Kevin Wilson, the CEO of Sterling Management, a practice-management-consulting company based in Los Angeles, says, “compliance officers simply have no power, knowledge or authority to act on the increased cases.”
I agree that the compliance officer’s position is filled with critical thinking gaps, little or no authority and people working in the wrong department.
I believe that salary contributes to the low reputation of this position. For example, the Volkswagen, the emissions software scandal led to massive losses by the company and severely damaged their reputation.
The average salary of a compliance officer in 2013 was $64,340. However, they are expected to exert their authority over executives, who earn 50 times more in bonuses alone. Having someone with a pile of papers serving as a compliance officer devalues the position.
I disagree with the notion that that power or lack of it the sole reason for the inability of the ethics officer to stop the scandals.
Companies need to increase the independence of the position and give the position the singular focus it deserves to enhance their effectiveness. I noted that very few CEOs wear the compliance officer’s hat. Normally, it is an afterthought or a secondary responsibility.
Based on the observations above I conclude only if the right person is chosen for the job can the position be of influence. The core CCO competencies are a sound business understanding, high integrity, discretion, sound judgment, understanding legal materials and excellent communication skills.
I believe that Compliance officers need autonomy, authority and the full backing of all the stakeholders in the business. If not, they risk throwing the entire company to the wolves.

Helane Morrison is a career lawyer. She has served as a director of enforcement programs in the Securities and Exchange Commission’s San Francisco District Office. Her intention is to ensure the maintenance of the offices aggressive during her tenure as the office administrator. She was the first woman to serve as district chief.
Morrison practiced law up to 1996 defending clients facing legal action instigated by the SEC and brokerage firms facing suits brought forward by customers. This experience helped her understand all compliance related issues.
To learn more about Helane’s career and life, connect with her on LinkedIn or find her on Crunchbase.