Today’s Chief Compliance Officers (CCOs) are in a position similar to that of Chief Financial Officers (CFOs) 15 years ago, and they face a comparable opportunity and challenge: how to become a more strategic partner in the organisation; a vital member of the C-suite, according to the fourth annual State of Compliance 2014 Survey released by PwC US. Survey findings show the role of the CCO has gained more prominence over the last decade and is evolving rapidly.
“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 organisation’s desired role for the compliance chief,” said Sally Bernstein, principal, PwC. “It’s difficult to be ‘chief’ in the current environment, but more companies recognise they need to get into the ‘business of compliance,’ and are working towards that goal.”
The results of the survey show that compliance officers have been tasked with an increasing number of responsibilities, asked to manage a complex variety of compliance risks and exceeded expectations in many areas. Despite sometimes having a shortage of resources, CCOs have often achieved successes within their companies. The business and regulatory environment, however, is becoming more complex and CCOs are expected to deliver better information to help executive management identify and manage organisational risks.
“There is an increased focus on compliance as a business-enabling function and a growing interest in the topic overall. This is clearly demonstrated by this year’s survey participation rate which grew 35 percent to over a thousand respondents from under 800 last year,” said Andrea Falcione, managing director, PwC. “PwC sees the increase in survey participants as an indication that many companies are using this study as a benchmarking exercise to help determine their ongoing compliance program needs.”
According to PwC, to assume a more strategic role in their organisations, CCOs should engage with the business in more meaningful ways. PwC recommends that emulating the behaviours of Chief Information Officers (CIOs) to achieve a similar evolution can be beneficial for CCOs, suggesting that CCOs exhibit the following behaviours: cultivate strong support of the CEO; maintain close working relationships with business leaders to drive understanding; leverage innovation ideas from other companies and functions; understand the organisational strategy and the broad range of risks associated with that strategy; and, recognise that compliance skills must be an enterprise-wide capability.
Survey results show corporate compliance staffing and budgets are trending up across the board. For the majority of companies surveyed, compliance budgets and staffing are increasing or staying at the same level across all industries. The survey also finds that organisations with more mature compliance functions, which are typically more regulated, tend to have larger budgets and staff than less regulated companies.