It is said that chief compliance officers (CCOs) are in the same position that chief financial officers (CFOs) were in about 15 years ago: gaining more prominence yet still needing to play a more strategic role in their companies in order to become essential members of the C-suite. PricewaterhouseCoopers’ (PwC) fourth annual State of Compliance Survey shows how the role of a CCO is rapidly evolving and how current CCOs can further their business prominence.
According to the study in which over a thousand organizations were surveyed, 69 percent of companies have a CCO while the other 31 percent said they did not. It seems that larger and more regulated companies tend to have CCOs, while smaller and less regulated companies should consider establishing the role of a CCO.
The growth of the CCO is complemented by the increase in staffing and budgeting in compliance departments within the past year. The study shows that there was a 47 percent increase in compliance staffing as well as a 45 percent increase on compliance budgeting during the last 12 months.
The report also shows how today’s CCOs are facing new responsibilities such as overseeing compliance efforts throughout the organization as well as providing senior management and boards with insights on compliance and its effects on the company. However, CCOs are finding challenges in expanding their roles. While still focusing on the traditionally “owned” areas of compliance such as privacy and confidentiality, industry-specific regulations and bribery and corruption, CCOs can become more influential by creating closer ties to the business by including business representatives on the compliance committees.
Sally Bernstein, a principal in PwC’s Risk Consulting Advisory, says, “As the CCO’s role further evolves, compliance will become more integrated with business performance and CCOs will assume a more strategic role. Overall, the future of compliance depends on defining not just the compliance function, but also specifically the organization’s desired role for the compliance chief. It’s difficult to be ‘chief’ in the current environment, but more companies recognize they need to get into the ‘business of compliance,’ and are working towards that goal.”
Furthermore, PwC advises that in order to gain the support and attention of board and business leaders, CCOs should broaden the scope of issues reported on to include the top priorities of directors such as strategic planning, succession planning and IT risks. By incorporating these important business objectives, CCOs can raise the profile and importance of compliance functions.
“As companies grow their corporate compliance functions, we hope to see a shift in representation within the department. We recommend that, in today’s increasingly complex business and compliance environment, compliance departments be staffed by cross-functional teams encompassing different skill sets such as financial, operational or technology backgrounds, as opposed to homogeneous teams of people with legal (or similar) backgrounds,” states Andrea Falcione, managing director at PwC.
By integrating compliance into business operations all across the company, CCOs can further increase their prominence within their organizations. Although CCOs are facing obstacles on the rise, opportunities have never been greater for the evolving role of the chief compliance officer.