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With risk comes reward: Compliance roles increase in complexity

A survey has revealed that compliance professionals anticipate their growing personal liability risk along with the growing expense of a high-quality compliance team

The role of the compliance officer is growing in importance, and therefore expense, for many companies. Compliance officers are increasingly sought after as U.S. regulations on companies of various sizes focus in on maintaining perfect compliance. Indeed, the Securities and Exchange Commission will start holding compliance officers personally reliable for their companies’ failures in a new, aggressive policy. So it is no wonder that compliance officers themselves are expecting a bit of a crackdown on their personal liability.

A recent survey by Thomson Reuters revealed that 53 percent of compliance officers feel that their personal liability has increased, and 66 percent of those surveyed expect the costs of senior compliance officers to increase in 2014. A combination of factors is at work here that is contributing to these projections — increased cost of compliance and regulatory changes, for two. The annual survey covered 71 countries and 600 compliance practitioners. 

Chris Perry, managing director of Risk for Thomson Reuters stated: ”The ability to comply with confidence and transparency is integral to building trust in the financial services sector…Compliance leaders are being held to increased accountability amidst an ever-increasing volume of regulation, the expectation to move and comply fast, and the exposure to record fines for non-compliance, now regularly totaling in the billions. In this time of heightened scrutiny, it has never been more important that boards support their compliance function and its senior leadership with the budget, resources and tools to help ensure transparency, trust and a lasting change in behaviors throughout firms.”

There is an expectation among those surveyed that the amount of information published by regulators is going to increase this year, which necessarily contributes to a level of further transparency, but also increases risks for compliance officers. 75 percent of respondents expect an increase in the amount of information published. 

All in all, the compliance practitioner’s role is getting more complex; as the vital nature of having a high-quality compliance team becomes more essential to businesses, it is increasing in cost. Therefore, while compliance officer salaries may increase, so does their risk for exposure and legal proceedings, should they be found at fault.

 

Further reading:

Risk and compliance officers saying, ‘Show me the money!’

10 traits of a good chief compliance officer: Lessons from polar exploration 

JPMorgan Chase’s chief compliance officer steps down

Contributing Author

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Juliana Kenny

Juliana Kenny is a contributor to InsideCounsel.com, covering a range of topics including patent litigation, conflict mineral laws, executive compensation, and antitrust regulation. Juliana earned B.A.s...

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