In today’s regulatory environment, demand is high and supply is low for the sought-after profile of Chief Compliance Officer. This puts great pressure on CEOs and boards of directors to make smart hiring decisions. This issue is exacerbated by the fact that the CCO profile is still relatively new, and management has little to no experience in hiring this unique profile. With that in mind, here are seven hiring areas where companies tend to go wrong…
- Believing Compliance is a Policing Function
Viewing compliance as a policing function was quite common around 12 years ago, so companies tended to recruit former government prosecutor types with an attitude of, “There’s new sheriff in town.”
It has since been proven that this philosophical approach just doesn’t work. Employees won’t trust or share valuable information nor seek advice from someone they view as an adversary.
Fast forward to today, and we find that more progressive companies recognize instilling a healthy ethical and compliant culture requires that the CCO be more the business partner/consultant type.
Experience has shown that the most effective CCO is a business savvy professional who works in a collaborative way to help the organization achieve its goals while also steering clear of regulatory issues.
- Failing to Require Industry Experience
It’s imperative that the CCO you hire bring proven expertise and experience in the seven elements of a compliance program promulgated by the Officer of Inspector General. This basic technical proficiency must be layered with specific knowledge of risks and regulatory requirements of your industry.
Example: the pharmaceutical industry has great exposure to interaction with health care professionals. In contrast, the financial services sector is more vulnerable to anti-money laundering and financial crimes issues.
Your next CCO must know where the skeletons are buried and be immersed in the industry to identify future risks as well.
- Failing to Develop a CCO Profile
Building a targeted profile for your next CCO requires getting input from the key stakeholders the new CCO will spend considerable time with.
This exercise is best accomplished by sitting around a conference table and asking questions like:
- What do we believe to be our greatest compliance risks?
- Where are we currently in our ethics/compliance life cycle? Toddler stage, teenage stage, mature stage?
- What tangible deliverables do we expect from the CCO in the first 12 months?
The answers from this critical exercise will form the basis of the job profile you create.
And by the way, the best hires are the result of creating a job profile — not a job description. Click here to learn the difference.
- Ignoring Important “Soft Skills”
Since the successful CCO is a business partner – not a sheriff – it’s critical that you consider a candidate’s “soft skills.”
You will rely on this professional to influence your organization’s culture, so the best candidate is a skilled communicator, mediator, presenter and team-builder.
Here’s a deeper dive: 8 Characteristics to Look for in Your Next CCO
- Choosing the Wrong Reporting Structure
The government recommends the CCO report directly to the board of directors with an administrative dotted line to the CEO. The most common alternative is reporting directly to the General Counsel.
So, what’s the big deal, you ask, with choosing the latter?
About 50 percent of the CCOs won’t entertain reporting to the GC because doing so is fraught with risk. The issue centers around lack of actual and/or perceived independence (this is a long and bitterly contested subject, by the way.)
- Not Preparing for Tough Questions
Since CCOs are in high demand, you can bet that savvy candidates will be thorough in their own due diligence process and will pose a few hardball questions to evaluate your organization before coming aboard.
Preparing for these questions can be the difference in landing the CCO of your choice or watching your ideal candidate accept an offer from your competition.
So do your homework. Here’s a list that will help: Top 20 Due Diligence Questions CCO Candidates are Asking in Job Interviews
- Asking Generic Interview Questions
The vetting of any executive includes some generic questions, of course, but hiring a CCO requires digging deeper to reveal the qualifications that are unique to this relatively new profile.
We’ve prepared you for this important interview with a downloadable list: The Compliance Officer Job Interview: 10 Questions to Ask Candidates (and the Answers to Listen For).Published by Conselium Executive Search, the global leader in compliance search.