Today I celebrate a potpourri of history to lead into some leadership lesson for a Chief Compliance Officer (CCO) or aspiring CCO. According to This Day In History, today marks the second formation of the Committees of Vigilance in San Francisco in 1856. The first committee was formed by 200 or so in 1851. The vigilantes consisted largely of the merchant and elite professional classes of the city. They temporarily imprisoned criminals. A handful of criminals who were found guilty of serious crimes, like murder, were hanged. More commonly, though, the vigilantes simply deported criminals back to their homelands.

The second committee had much more political overtones as it focused on a formerly entrenched Protestant class against an immigrant Irish-Catholic group, which had recently taken political power. They tried and hanged the recently elected Irish-Catholic mayor who had been lawfully arrested for murdering a political opponent. This long-ago event of early California history was featured on a TV show I watched growing up, Death Valley Days. I remember the episode around this story as pre-politician Ronald Reagan played the military governor, whose strong guiding hand put down this second Committee of Vigilance, non-violently. Hosting the show was Reagan’s final gig as an actor.

I thought about similar leadership skills when reading a recent article in the New York Times (NYT) Corner Office column where Adam Bryant interviewed Autumn Manning, Chief Executive of YouEarnedIt.com, an employee recognition and reward software company. As a CCO, you must do a “good job communicating the big-picture vision of where you’re going. It’s about setting that North Star for everybody and then breaking it down so they know their specific role in achieving that goal. Otherwise, people start moving in their own directions.” I found this North Star visual representation quite telling and appealing for every CCO to remember where you are heading and how you are going to get there.

Another area the CCO could take heed from Manning is with data and the operationalization of your business. Manning noted, “You also have to make sure you can measure every part of the business, and then have a conversation very publicly across the entire company about those metrics and how we can adjust and get better. That requires a lot of trust and transparency. Just when I feel like we do it well, I realize people still feel siloed.” It is this siloed nature of internal corporate data which stymies many CCOs and compliance functions in getting the big picture to move forward. You should work with your IT or internal audit functions to try and break down these siloes.

Manning also spoke to another key leadership trait not often enough discussed, self-awareness. She stated, “To be an effective leader, you have to have self-awareness. I’ve always known that I have a lot of intensity and a lot of passion. And that can be my greatest strength, but that can also be a big weakness of mine. If applied the wrong way, it breeds the wrong behavior, like people not speaking up because I am so passionate and so intense about what I believe. So I have to go out of my way to communicate my intentions.”

That led to her next point, which is the most consistent theme I have uncovered in all the research I have done on leadership; it is to listen. Manning asks her direct reports lots and lots of questions. She related, “I tend to dig in and pepper people with questions. It may feel like an interrogation. But a lot of it is just so I can understand what’s actually happening — the full scope of the problem and the potential solution.” Yet she uses this technique to listen to the answers, telling folks, “I’m just going to go in my mode now where I’m just going to ask a bunch of questions in the hope that we identify some areas where we can improve.” That helps a lot to make sure people know why I’m doing what I’m doing.”

Manning also is an exponent of continuous improvement of her organization, which is something every compliance practitioner should embrace. The term she used was Make Us Better (M.U.B.) meetings and she asks her employees, “how we can be better, and what could be better.” Another way Manning works to break down siloes is something she called “stay interviews”. Using this technique, she will “randomly pick people every quarter and sit down with them for 15 minutes to ask them how things are going. The point is to have a direct flow of communication across the business so people stay with you instead of hearing from them during an exit interview about why they’re leaving.”

Some of these leadership ideas inform her thoughts in hiring. Manning does not hire for a “functional role” because “Once you start hiring for function only, I think you build a bloated organization with people who don’t have a broader perspective of what you’re trying to accomplish.” She enquires into what drives them, “what a win looks like for them personally, and how they’ve overcome things in their career. I’m really looking for whether they’re in it for the big-picture win as a team or are they in it for themselves. You can get a sense of that just by the questions they ask.”

To more fully operationalize compliance, I advocate using your Human Resources (HR) function. Manning demonstrated another technique which the compliance discipline could incorporate into such a plan. Manning said that she will “ask the candidate to put a plan together for me. That will show you how motivated someone is to really dig in and figure it out, and whether they can actually do the job. The details might not be right, but it will show you how they think and how they’ll solve problems day to day at work.”

As a CCO you should consider making this a part of your employment interview for not only hires in your department but also for senior executive or Chief Executive Officer (CEO) types. This way you can determine their views on compliance, inculcate the importance of compliance into the interview process and if any of the ideas can be used, more fully work to operationalize your compliance function.

Manning provided some interesting insights for any CCO. Use her North Star analogy to set your goals and follow them for compliance. Use your own corporate data to break down the siloes in your organization hindering compliance. Ask questions and listen to your co-workers about compliance issues. Finally, hire very talented folks and use their insights to further operationalize your compliance function.

 

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, 2017

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