By Allie Philpin
Compliance officers, along with those employees concerned with regulatory and ethics issues have risen amongst the ranks recently, with many having the kudos of a seat on the board, so says a recent survey from the HCCA (Health Care Compliance Association) and SCCE (Society of Corporate Compliance and Ethics). According to the survey, The Relationship between the Board of Directors and the Compliance and Ethics Officer, reveals that compliance departments are more likely to report to the CEO or board than in the past.
Responses were collected from the SCCE and HCCA databases of compliance and ethics professionals, with a total of 626 participants, of which 69% were women. In the survey, half of compliance departments reported to their CEO and in the healthcare industry, this figure rose to 62%! In the past, it was usual for compliance to report to the legal team, but just 20% of departments continue to do this, and even lower when it came to healthcare compliance departments at just 12%. But there is an exception; when it comes to public companies, 50% of them continue to report to the general counsel, and only 33% to their CEO or board.
CEO for SCCE and HCCA, Roy Snell, said: “It’s now clear that compliance has become not just central to business, but central to business leadership. The commitment of compliance to finding and fixing problems is bringing real value to C-suites.”
Another interesting fact from the survey’s results is that the board is working with compliance far more regularly than in the past, meeting as often as once per quarter. And in another turn against tradition, reports collated by compliance officers are no longer screened, or edited, by the legal team, says more than 56% of respondents.
Snell added: “Compliance is not just the legal department in another form. It’s a profession of its own, and those who advocate for compliance to report to legal are arguing for a relationship that neither serves compliance or corporate leadership. That’s probably a significant reason why reporting to legal is only done by a fraction of companies.”
But this new trend isn’t for everyone; the survey also reported that public companies are not as keen as private companies to buck tradition with many legal teams still editing compliance reports. Whilst compliance professionals say they are satisfied with the relationship they have with their boards, and report that the board values the compliance teams, others state that their reports are more likely to be filtered; and if they report to the board, they are unlikely to report to their CEO.
Snell closed by saying: “Compliance is not just about helping companies follow the law. It’s now integral to how businesses are led.”