Compliance is the buzzword in every business nowadays. The role of the compliance officer thus becomes an integral part of the business framework. As per a report published in the daily ‘The Hindu’, Meta and WhatsApp were scouting for a Compliance Officer or nodal contact in India.
The curiosity in knowing more about the role and responsibilities has leaped. This role may have different names. It can be a chief compliance officer (CCO), nodal officer, grievance officer, etc. Before probing further into the role of a compliance officer, it is imperative to understand why compliance matters in business.
Compliance, in simple words, is adhering to the rules and regulations prevalent in the particular region for the business processes. It applies to all divisions of an organization. The preparation of internal policies in an organization depends on the compliance factor.
Non-compliance is costly in terms of fines and penalties. There is also the risk of loss of reputation. To borrow the words of Henry Wadsworth Longfellow, “it takes less time to do things right than to explain why you did it wrong.” In short, compliance is critical while doing business.
Role, Responsibilities, and more about Compliance Officer
Compliance is like an armor of protection to the business. The corporate compliance insights define the role of a compliance officer as one who guards corporate integrity, accountability, and ethics. He/she has a unique role to play. This role is like a bridge between the C-suite executives and the different departments. This flow of information ensures the management decisions and solutions are in tandem with the laws and regulations.
The primary responsibilities of a compliance officer are as follows:
- Develop internal policies in concordance with the laws and regulations.
- Educate and train the staff to know their job role to concur with the approved policies and guidelines.
- Monitors every process to ensure adherence to the internal and external laws.
- Reevaluation of the different business processes according to the amendments in the rules and regulations.
- Liaison and advisory role to and in between the departments and management.
- Ensure clarity in the information flow between departments to ensure adherence to law and ethics.
As mentioned earlier, a compliance officer must keep abreast of every regulatory change that affects businesses. For example, one of the significant changes in recent times is the dependence of any business on cyber technology. The risks involved due to electronic malfeasances like hacking or data breaches are sensitive and expensive. The relevance of the compliance officer is definitely on an uphill trend.
Earlier, the job role of a compliance officer was more like a compliance gatekeeper. There is a shift in this perception to a more strategic role. According to the survey conducted by Deloitte, 57 percent of the companies rate their compliance culture as positive. These changes require additional skillsets for the role of an officer.
The desirable skillsets for an efficient compliance officer are:
- It is necessary to have an eye for detail. The different policies and their amendments need to be followed with a hawk-eye precision to understand what comes under compliance and non-compliance.
- It pays to have a high ethical standard. A strong sense of right or wrong helps to understand the need for regulations.
- A compliance officer is a standalone role that acts as an interdepartmental link inside the firm. The paperwork and reading involved will be on a larger scale. So, reading, comprehending, proper filing, etc., is beneficial to this role.
- It helps to nurture an attitude of enterprising leadership. Problem-solving skills and critical thinking are a must skill to a compliance officer.
- The practical side of a rule will help the employee to understand and embrace it. It is possible with top-notch communication skills and a high emotional quotient. It helps to connect with the employees and understand them better.
- A successful compliance officer is an enabler and influencer, according to Deloitte. These skill sets help to understand the policies better. It is also needed to create a positive culture of compliance.
Though the job includes legalities, rules, and regulations, it does not belong to the legal division of the organization. A compliance officer, as mentioned earlier, is a standalone job. So, what qualifications are desirable in an efficient compliance officer? It gives an edge to being a lawyer, but it is not mandatory. Several certification programs aim to enhance the skill sets needed for a competent compliance officer. A few of them are:
- Certified Compliance and Ethics Professional (CCEP)
- Certified Regulatory Compliance Manager (CRCM)
- Certified Compliance Professional (CCP)
- Certified Professional Compliance Officer (CPCO)
An Officer closely resembles the navigator of a rally car. The navigator directs the driver with specific instructions, keeps an eye on the possible risks, and warns ahead of time. A compliance officer has to steer the business forward with clear instructions on what to do and what not. A detailed study of the various policies helps in understanding the possible risks. It is clear communication that helps to mitigate the risks and find possible solutions.
Colin Clark, the British economist, has famously said that compliance is the byproduct of just doing the job right in the first place. It seems easy to understand when perceived practically. The new-age compliance officer has more authority to play a strategic role in decision-making and problem-solving. It helps to create a positive compliance and ethics culture.
Diligen has always emphasized the importance of compliance to its clients. The well-experienced team can guide the business in understanding the rules and regulations. It helps in formulating the internal policies of the firm.