7K0A0246One of the areas that a Chief Compliance Officer (CCO) must master is looking beyond their own compliance department to the company as a whole. CCOs must therefore lead their own compliance function but also lead with an enterprise wide perspective. Simply put, the nature of any CCO position is an enterprise wide role to prevent, detect and remediate any compliance issues before they become full-blown Foreign Corrupt Practices Act (FCPA) violations. Yet this enterprise wide mindset is something that any CCO or indeed compliance practitioner must develop.

This issue was recently explored in a MIT Sloan Management Review article by Douglas A. Ready and M. Ellen Peebles, entitled “Developing the Next Generation of Enterprise Leaders”. I found the article very useful for taking the compliance practitioner from implementing their vision of a compliance department to learning to build with an enterprise perspective. The reason would seem obvious; compliance demands an integrated response across “functional, geographic and business unit boundaries.”

It also seems that successful enterprise leaders are able to see “the importance of the micro and macro simultaneously”. A key component of any successful CCO is understanding that no one size fits all in compliance. This is certainly magnified across an organization. The authors said, “their trust in their leaders and their peers enabled them to share successes and combat difficulties together.” This is mandatory space for any CCO or compliance practitioner.

In a chart in the article, the authors laid out what steps a builder would take and followed it up with the steps a broker within an organization would bring. Adapting them for the CCO or compliance practitioner yields the following. Build a compliance vision, strategy and brand and then broker shared meaning across the company. Build enthusiasm for the compliance program and combine this with a sense that everyone in the organization is responsible for compliance. Build compliance department capabilities and then turn this knowhow into an integrated compliance function across the organization. Build support for compliance values and principles and burn them into the DNA of your organization. Build compliance teams throughout the organization and broker that talent across the company. Yet even beyond the personal stakes of the CCO are the benefits to the overall organization of a CCO with an enterprise leader mindset. A compliance solution should be integrated across an organization so the business units can work together in a seamless fashion. Such an approach also brings more and great efficiencies.

The authors believe the key essence of an enterprise leader comes from combining ““two often incompatible roles” – those of a builder and broker.” This means that any CCO must integrate their vision for compliance across an organization by integrating it “into the wider corporate vision, clarifying where the organization and where their teams can best contribute, both within and beyond unit, geographic and functional boundaries.” The authors identified “six components of the mindset of successful enterprise leader.”

  1. Heightened Sense of Place. By absorbing a corporate culture, a CCO can use that sense of the company as a competitive advantage. Further, such persons can transmit that passion to others in the organization. In today’s hyper-transparent world of reputational risk, a culture of compliance can be a business differentiator. Yet with all senior management leadership, it is what you do more than what you say.
  2. A Broad Sense of Context. Here the authors intone that it is the integration of understanding the business of a company with all its various components. It is not simply the crossing of siloed boundaries but understanding the differences in business units, corporate functions and even geographic locations that can bring this broad sense of context.
  3. A Sharp Sense of Perspective. Interestingly the authors believe this skill is the ability to see both the big picture “but they also appreciate the pixels that make up the picture.” CCOs need to learn from everyone in the organization. This can expose the CCO to different leadership styles but the CCO can also see how such leadership styles work in various areas and with different constituencies. The CCO should use other learning tools such as coaching, mentoring and observation to see what really works.
  4. A Powerful Sense of Community. The authors believe that high-potential talent employees are “drawn to peer networks which challenge and support them.” The CCO should cultivate his or her own personal and professional network. Many companies have a Chairman’s Group or President’s Group to challenge such individuals. Any chance to participate in such an opportunity should be accepted.
  5. A Deep Sense of Purpose. The authors believe that enterprise leaders are “exceptionally passionate about their careers and their companies.” I would certainly hope that a CCO or compliance practitioner would have passion around this field. However the authors believe such passion can occur as a result of “reflection, introspection and ability to change as a leader.” Moreover, “rather than influencing employees through individual speeches or stories, the everyday connections between” a CCO’s sense of purpose and the compliance vision can work to “form an indelible impression” about the importance of compliance to an organization.
  6. An Abiding Sense of Resiliency. The authors said that enterprise leaders need to have a next generation mindset; knowing where you came from is certainly important but enterprise leaders must be “fit for the future” and be committed to continuous improvement going forward. The authors made clear this is not “organizational agility” or even the ability to pick one’s self up after a setback but rather the ability to “pivot to the future” even after a stumble.

By using these six components of a successful enterprise leader, a CCO or compliance practitioner can bring greater corporate wide presence to the compliance function. Integrating these six steps together into an already forward and outward looking regime can give compliance the tools to make the doing of compliance second nature within an organization. For if you can make compliance a part of the business process it becomes second nature and a recognized part of any business transaction. The authors ended their piece with a quote from Bill Carapezzi, Pfizer Vice President for Finance and Global Operations, who said, “As I learned to work in new way at Pfizer, I developed better relationships and learned how to mobilize my team for the greater good, which enabled me to deliver more value for the company, and I just felt better.” This would seem to be a laudable goal for every CCO as well.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2015

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