Unveiling the Responsibilities and Skills of a Chief Compliance Officer

Compliance is a mandate for industries such as healthcare, fintech, information technology, telecommunications and more. Within these sectors, the frameworks’ increasing complexity necessitates meticulous supervision and effective maintenance of the compliance function. Regulatory bodies are getting stricter with enforcement actions, imposing severe penalties and fines in place. Moreover, as businesses expand globally, there arise geographical challenges that compliance can address. Given these trends, the demand for Chief Compliance Officers will only increase in the coming years.

The Bureau of Labor Statistics has projected 15100 job openings for compliance officers in the U.S. alone between 2021 to 2031. If you are an aspiring professional seeking to become a Chief Compliance Officer, we have just the thing for you. Read on to understand how to become a Chief Compliance Officer and the roles and responsibilities to be carried out.

Who is a Chief Compliance Officer?

A chief compliance officer is a management executive responsible for developing, implementing and managing compliance activities to ensure adherence with regulatory requirements. The C-suite officer is a subject matter expert and reports directly to the Chief Executive Officer (CEO). The role of a CCO is of paramount importance especially in highly regulated industries.

Roles and responsibilities of a new CCO

A Chief Compliance Officer is a blend of legal expertise, strategic vision and ethical leadership. Over the years, their roles and responsibilities have transformed from traditional policy management to cultivating a sense of compliance ownership amongst other business functions.

Let’s look at some of the roles and responsibilities of a new CCO:

Developing compliance programs

The Chief Compliance Officer is responsible for creating an effective compliance program after interpreting regulatory requirements as per business context. The executive maps relevant controls to requirements, drafts policies, and procedures, and ensures proper task assignment to compliance teams for efficient implementation.

Monitoring risks

The CCO conducts regular risk assessments to understand various types of risks resulting from non-compliance, such as cybersecurity risks, operational risks, financial risks, and more. The impact and likelihood of these risks is analyzed through a risk matrix and disaster recovery and business continuity plans are tested to understand security maturity. Mitigation plans are developed accordingly using a combination of risk response strategies.

Facilitating communication

The CCO facilitates communication with cross-functional leaders to ensure collaboration for compliance tasks. Next, the officer directly communicates with senior leadership for budget approvals or any big decisions. Lastly, the executive engages in external communication with regulatory bodies, industry groups, or vendors for their compliance reports.

Training and education

The compliance officer leads the arrangement for workforce training and awareness. The executive ensures that the stakeholders understand the importance of compliance and the applicable requirements. Phishing simulation exercises and other tests are also arranged to minimize threats to sensitive information.

Resolving compliance issues

The CCO ensures a healthy culture of compliance by resolving any issues that can impact regulatory adherence. The issues can stem from third-party relationships, ethical misconduct, compliance violations, training gaps, and other areas. The officer must implement the right decisions to resolve these issues and minimize future recurrence.

Conducting regular assessments

The officer conducts annual reviews, periodic investigations, and assessments, or internal audits to identify any existing compliance gaps or improvement areas. It can involve reviewing documentation, conducting vulnerability scans, and measuring current achievements against the KPIs (Key Performance Indicators).

Compliance reporting

The Chief Compliance Officer is a key representative of the compliance department and reports compliance status to the CEO and founding team. An executive report with key details is presented to the board to give a birds-eye view of the compliance progress. Discussions on upcoming threats or emerging trends are also discussed to ensure support and seek necessary approvals.

Also check: Top 9 Risk Assessment Tools in 2024

Collaborate with external auditors

The Chief Compliance Officer collaborates with the independent auditor at the time of external audits. The officer must arrange for necessary evidence to ensure and provide context wherever necessary to ensure a smooth audit process.

What does a day look like for a CCO?

The Chief Compliance Officer’s morning begins with checking email updates, including newsletters and industry trends emails to stay abreast of regulations. The day is spent overseeing compliance activities using compliance automation software (most enterprises leverage automation tools). Such tools enable granular-level monitoring, and the officer can take stock of the pending compliance tasks from the reporting dashboards. Based on the reports, the officer coordinates activities such as pending training, policy updates etc to maintain and manage controls.

Another portion of the day is dedicated to handling data, generating reports and engaging in strategic planning. Next, there are team meetings and supervisory responsibilities. There can be a dialogue or strategic meeting with the board of directors and the day wraps up with planning for the next day’s to-dos. 

A CCO’s role is multifaceted and there can also be ad-hoc requests and tasks. It is important to note that the day-to-day activities of a CCO can vary based on the organization’s established systems, applicable securities laws, and scale of requirements.

Skills required to become a chief compliance officer

A Chief compliance officer requires business acumen, interpersonal skills, technical abilities and prompt decision-making skills to come out as a strong executive. The officer must also be keen to dive deeper into the regulatory landscape and champion data and analytics for overall success.

The following are the skills required to become a chief compliance officer:

Quick decision making

CCOs must be proficient in identifying, understanding and analyzing compliance risks while developing quick and effective strategies. Agility is crucial in the compliance space where CCO’s frequently encounter incidents that demand swift responses.

Regulatory understanding

Chief Compliance Officers must have up-to-date knowledge of the regulatory environment, an understanding of legal requirements, and the ability to interpret these requirements. They must subscribe to newsletters, attend seminars and workshops, and pursue professional certifications like CRCM (Certified Regulatory Compliance Manager) to stay abreast of regulations.

Analytical skills

The compliance leader must have problem-solving and analytical skills to navigate through the regulatory intricacies. They must be able to establish the root cause of the risks, analyze business impact and suggest the right mitigation actions. It is equally crucial to evaluate various scenarios and gauge the success of corrective actions.

Communication skills

Compliance activities require networking and relationship building with the team, regulatory bodies, third parties, etc. It also requires the understanding of technical jargon and translating the compliance regime in simple terms to the non-technical stakeholders. A CCO must have excellent communication skills for these purposes as well as for presenting detailed annual compliance reports.

Leadership skills

A CCO must cultivate a compliance culture that comes with strong leadership and work ethics. The leader must not be too forceful with decisions and have a respectful approach. It is essential to set a positive tone at the top, build trust and credibility, and long-term sustainability of the organization.

Technological skills

The Chief Compliance Officer must be technologically proficient in compliance management software or automation tools like Sprinto. Knowledge of such tools helps streamline operations, simplify granular-level monitoring and expedite the audit-readiness process.

How much does a chief compliance officer earn?

A Chief Compliance Officer salary is usually composed of a basic pay along with bonuses, perks, stock and equity options and other such benefits. Here’s what Chief compliance officers can make in the United States:

• For the ones starting, the base pay can start from $70k+ and reach to $130k+.
• CCOs with some experience average $200k+ to $375k+
• If you are in the top 10% working for a company averaging $1 billion to $5billion revenue a year, you can expect an annual compensation of $500000+

Sprinto is a CCO’s compliance ally

For a Chief Compliance Officer to stay ahead of the curve, agility is paramount. Your organization wants quick certifications to convince prospects that demand compliance assurance. You must therefore know how to leverage compliance automation tools like Sprinto to your advantage.

Sprinto has adaptive automation capabilities to help you get to the certification stage fast. It can streamline workflows, help with role-based access controls, has in-built training modules and policy templates and much more to expand the scope of your compliance program. Forward-thinking CCO’s rely on Sprinto to champion compliance and build resilient organizations.

If you are a CCO looking for a compliance ally, we have just the thing.

FAQs

What educational qualification is required to become a Chief Compliance Officer?

You must have a bachelor’s degree in business administration, finance, law or any related field. Having a master’s degree can enhance your knowledge but it is not mandatory. Sufficient compliance experience and leadership positions are required before you can become a CCO.

What is the professional hierarchy to become a CCO?

The specific hierarchy to become a CCO can vary based on organization and industry. However, before they become a C-suite member, compliance professionals start at entry-level positions such as a compliance analyst or a legal officer followed by mid-level, senior officer and director-level positions.

What certifications do CCO’S need?

Chief Compliance Officers can go for certifications such as Certified Compliance and Ethics Professional (CCEP), Certified Regulatory Compliance Manager (CRCM), Certified Professional Compliance Officer (CPCO), Certified in Healthcare Compliance (CHC) and more.