London Governance & Compliance Academy

Wanted: Compliance Officers

This article was originally featured on AGRC’s blog. You can find it here: Wanted: Compliance Officers – The Association of Governance, Risk and Compliance (AGRC)

It is fair to say that new consumer-focused compliance requirements are emerging seemingly daily. Corporate accounting mandates, anti-money laundering laws, directives and ongoing legislation changes at a national and international level mean that the demand for officers to ensure companies adhere to these requirements is also increasing apace. Finding candidates for these roles is challenging, given that such individuals will need to demonstrate a strong knowledge of financial laws, experience in managing risk and a whole raft of soft skills to go with these technical abilities.

And the requirements placed on companies to stay abreast of the regulatory standards with the rise of cryptocurrency, data protection, fraud prevention and the mushrooming of online retail, seem to multiply. It seems like a role in compliance could mean plenty of opportunities in the coming years, with strong demand pushing salaries up quickly. The Bureau of Labor Statistics in the United States predicts significant growth in the employment of financial examiners of 18% by 2030. Compensation for successful compliance personnel can often be generous too, both in terms of salary and benefits. There is no such thing as a guarantee of work in the employment market of today, but strong-performing compliance officers can certainly stack the odds in their favour.

All that being said, there are weighty responsibilities on the shoulders of compliance personnel. They are responsible for ensuring that every corporate process in the operation of the business complies with continually expanding external regulations and also meets the internal standards that the business has developed. At the same time, compliance officers must also be able to communicate effectively with all levels of the business, advising management and shaping business decisions whilst also understanding the workings of the whole organisation. Companies would be running a high level of risk if they failed to ensure active monitoring of compliance, potentially exposing themselves to significant fines and worse, immeasurable reputational damage.

Compliance officers create a link between the different specialist departments of the business and management, regulating the flow of information, identifying potential risks, developing proposals to mitigate that risk and, at the same time, respecting the different responsibilities that exist and the requirements of confidentiality. They need to ensure that there is compliance with the law whilst still allowing the business to run smoothly and optimise its existing processes and procedures where possible.

Compliance is quite a broad theme. This will particularly seem to be the case in small to medium-sized firms where the compliance team may consist of only one compliance officer with a very wide range of tasks and roles falling on their shoulders. Although the number of individual jobs involved in this role are many and varied, the main functions that will need to be fulfilled can perhaps be categorised into five often overlapping areas. The compliance officer:

Monitors: All procedures and processes need to comply with the regulations and ethical standards that are set internally, externally at a national level, and, where applicable, internationally. Such monitoring is not static, and therefore requires constant updating.

Manages: Through research, recording and analysing data and information, compliance officers ensure that the business runs smoothly and that compliance risk assessments are conducted. They need to understand risk level, significance and scope, and also manage voluntary best practice relating to professional standards.

Educates: All personnel within an organisation need to be informed of, and trained in, managing any legal changes and developments to compliance guidelines. Further, employees also need to be clear as to the impact on the organisation if non-compliance is detected. A culture of compliance also needs to be created, in collaboration with other departments and through appropriate and effective learning processes.

Liaises: The compliance officer is the contact person who links department heads and senior management across the organisation. This also means that all the processes that take place lead to effective and timely feedback or action escalation where required.

Assesses: Regular assessments must be conducted to confirm that policies and practices are entirely compliant with the law.  This process should also ensure that all marketing materials, presentations and websites are fully compliant, and that irregularities and any non-compliance issues are quickly detected and acted upon.

The compliance officer does earn a high salary, but this accurately reflects the very high degree of responsibility that the position carries with it. It is often said that the Chief Compliance Officer bears the highest degree of personal liability risk. Companies should actively consider adopting some form of insurance to mitigate this risk and take careful note of what this insurance covers. In many ways this also connects quite directly to the need to clarify the responsibilities that the officer holds and enshrine those in a binding document at the outset of the role.

In concluding this introduction to the role of the compliance officer, it is perhaps useful to take a brief look at the essential skills that are needed for success in what is a very complex, constantly changing and particularly demanding position.

Dealing with grey areas: Many rules and guidelines are not black and white. Because of this, compliance officers will need to be able to interpret the spirit of a rule, as well as the actual language it uses.

Managing different perspectives: Whilst it is important to be able to keep the big picture in mind, compliance staff will also need skills in attending to many complex details.

Seeing beyond the obvious: The bigger picture of compliance is also in understanding not just the surface requirements of regulations, but also seeing beyond this to grasp what regulators are trying to accomplish.

Application to real life: A thorough knowledge of the rules and regulations is obviously vital, but there is also a skill in applying these standards to actual situations that often involve compromises and always affect real people.

Assessing risk and risk tolerance: Decisions will need to be taken based on an ability to assess risk, appreciate the risk tolerance of the business and also understand the litigation environment it works in. Such decisions may also sometimes need to be undertaken in quite a short time frame.

Communication skills: Perhaps of all the skill areas, the ability to communicate effectively in both written and spoken form should be considered as the most important. Communication will take place across all levels of the organisation from senior executive level through to those on the front line. Negotiation, management and presentation are aspects that the compliance officer will need to perfect.

Is this a role for you? Do you have the aptitude, skillset and, above all else, the interest and enthusiasm to take on this exciting and important position? In doing so, you will certainly play a central role in an organisation, and in many ways you will also prepare yourself for further leadership positions and career opportunities that will build on the core skills developed as a compliance officer. Take a look at part 2 of this investigation into the compliance role to find out more about the potential for this role and also how to go about building a career here.