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The State of The Chief Compliance Officer 2018 - SAI Global

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We review industry research and some of our own to identify:
- Who are Chief Compliance Officers and their ethics & compliance peers?
- What do they do and what are their core responsibilities?
- What challenges do they face today? What rewards does the role bring?
- Where do they think ethics & compliance is heading in the future?

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The State of The Chief Compliance Officer 2018 - SAI Global

  1. 1. The State of the Chief Compliance Officer in 2018
  2. 2. In this short presentation, we’ll review industry research and some of our own to identify: 1. Who are Chief Compliance Officers and their ethics & compliance peers? 2. What do they do and what are their core responsibilities? 3. What challenges do they face today? What rewards does the role bring? 4. Where do they think ethics & compliance is heading in the future? 5. Ways to participate and share your perspective! Click through this presentation for some insights and facts we think you’ll find valuable, then visit the Compliance Officer Day website for more free resources you can use today. The State of the Chief Compliance Officer
  3. 3. Who are Chief Compliance Officers? attended grad school started as an attorney attended law school Chief Compliance Officers are a diverse group of individuals committed to promoting ethical behavior, maintaining compliance with regulations, and helping employees do the right thing, with a wide range of backgrounds, including law, human resources, and finance. 33%50% 33% Source: LinkedIn
  4. 4. Who are Chief Compliance Officers? Chief Compliance Officers tend to work longer hours and find their roles to be challenging and stressful. 0 20 40 60 80 100 1 0 20 40 60 80 100 1 0% 10% 20% 30% 40% 50% 0ver 60 50-60 40-50 40 Job stress as rated on a scale of 1 - 100 Job difficulty as rated on a scale of 1 - 100 Number of hours worked per week Source: 2017 SAI Global Compliance Officer Wellness Survey
  5. 5. The Role of CCOs in the Past and Present Almost 30 years have passed since the Federal Sentencing Guidelines for Organizations came into existence, serving as a catalyst for the creation of ethics and compliance programs that can help prevent and detect violations of law, in 1991. Back then, an effective E&C program was defined as an organization that: 1. Exercises due diligence to prevent and detect criminal conduct 2. Promotes an organizational culture that encourages ethical conduct and a commitment to compliance with the law. Source: Building an Ethical Culture: Why It’s Vital, How It’s Done (SCCE)
  6. 6. The Role of CCOs in the Present and Future In NASDAQ’s 2017 Global Compliance Survey, respondents revealed that their big- picture goal and most important function is focused on protecting reputation. Compliance departments most important function in respondent’s opinion Source: 2017 Global Compliance Survey (NASDAQ)
  7. 7. Scott Dahl, Inspector General at the U.S. Department of Labor and a former Ethics professor at Georgetown Law, believes modern CCOs and the programs they create possess 6 characteristics: Incorporate real-world examples and roleplaying Focus more on scenarios and less on rules Go beyond annual training sessions Make senior leaders part of the training experience Weave ethics & compliance into performance reviews Establish benchmarks for measuring program effectiveness The Role of CCOs in the Present and Future Source: Building an Ethical Culture: Why It’s Vital, How It’s Done (SCCE)
  8. 8. Traits and Habits of Successful Chief Compliance Officers In our Six Questions with an Ethics & Compliance Officer interview series we asked 18 E&C professionals to share the three traits they believe are essential for someone in their shoes to possess. On the next slide, we’ll share what we learned… Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  9. 9. The Challenges of Being a CCO today Patrik S. Florencio, Samuele Butera, and Erik Ramanathan have identified the three main forces driving compliance violations today. They’re not a lack of knowledge around rules and regulations, but: Greed Pressure Uncertainty Source: Building an Ethical Culture: Why It’s Vital, How It’s Done (SCCE)
  10. 10. The Challenges of Being a CCO today Source: The State of Ethics and Compliance in the Workplace 2018 (ECI)
  11. 11. The Challenges for Ethics and Compliance Professionals
  12. 12. Challenges: Time and Attention “Today's workforce is inundated with communication from all sides. An effective CCO needs to cut through that crowded communications space to grab their audience's attention and deliver an impactful and practical message. I only see this becoming more important over time.” – Seth Rice, AGC and Global Director, Ethics and Compliance at Kennametal Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  13. 13. Challenges: Business Savvy “To be truly effective as an ethics and compliance professional, you need to know the business. What are the most important risks for your business? What challenges, both internal and external, is your organization facing? What external requirements must you meet? What kind of culture does your organization have?” – Melissa Stapleton Barnes, SVP, Enterprise Risk Management and Chief Ethics and Compliance Officer for Eli Lilly and Company Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  14. 14. Challenges: Compliance Fatigue “I think one of the biggest challenges for compliance professionals today is finding creative ways to avoid ‘compliance fatigue’ – we have to be relentless and tireless in acting as ‘evangelists’ for our Codes, and for ethics and compliance. Also, in a very practical sense, facing the physical challenges of a global role that can call for extensive travel, late night calls, and presentations where you are constantly delivering at a very high level of intensity.” - Ana-Paola Capaldo, Director of Ethics and Compliance at Tech Data Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  15. 15. Challenges: Trust and Transparency “Compliance officers have to live this philosophy and ‘walk the talk.’ This may be challenging, as the message is easy, but its execution is not always. There are pressures and temptations in every market. Only if I understand the business and these circumstances, will employees perceive me as a trusted adviser who can work with them to find solutions to a particular challenge.” - Patrick Henz, Compliance Officer for Primetals Technologies Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  16. 16. Challenges: Reach and Influence “The most challenging part is that nagging fear that I could be doing more to penetrate the organization and reach the masses. I’m always looking for ways to have a greater impact.” - Samantha Kelen, Lead Ethics Analyst at Duke Energy Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  17. 17. Challenges: Meaningful Impact “The most challenging part of my job is to avoid destroying the playground. Employees perform best when they do their work for the pure enjoyment of it. When compliance must restrict this enjoyment by imposing policies, training, controls, and audits, it must do so by minimizing the impact on performance. The best way to minimize this impact is to ensure that employees understand why we restrict specific activities.” - Yan Tougas, Global Ethics & Compliance Officer at United Technologies Corp. Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  18. 18. The Rewards of Ethics and Compliance Professionals
  19. 19. The Rewards of Being a CCO The relationship between an E&C program and the culture of an organization is critical, and the data is clear. A genuine effort by an organization to address E&C can have a substantial effect on the overall strength of the E&C culture and outcomes. Source: Measuring the Impact of Ethics & Compliance Programs 2018 (ECI)
  20. 20. Rewards: Fostering a Culture of Integrity “We ask people to take our medicines at some of the most vulnerable times in their lives; therefore, everything we say and do, and every decision we make, must be made with integrity. So, the work we do to help foster a culture of integrity throughout the company is key to our mission - and that is particularly rewarding.” - Melissa Stapleton Barnes, Senior Vice President, Enterprise Risk Management and Chief Ethics and Compliance Officer for Eli Lilly and Company Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  21. 21. Rewards: Practical Solutions to Real Problems “The most rewarding parts are when I can contribute a practical solution to a problem and help the business do the important work of creating diagnostics in the healthcare space. I also find it incredibly rewarding when my team's work is acknowledged as practical, helpful, and fun.” - Virginia MacSuibhne, Chief Compliance Officer for Roche Molecular Solutions Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  22. 22. Rewards: Problem Solving “My favorite parts of my work, both former and current, are when I am able to help solve problems and when I am able to show people new ways of thinking about things. I love diagnosing problems, coming up with solutions, and getting people to the “Aha!” moments. – Hui Chen, Global Ethics & Compliance Consultant Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  23. 23. Rewards: Growth and Sustainability “By far the most rewarding part of my job is helping people to see that ethics and compliance is not just the right thing to do, but that it also directly supports the sustainable near and long-term growth of the organization. People and customers want to work for and buy from companies with integrity and purpose. I get recharged each time I have the privilege of watching this transformation in a colleague.” - Seth Rice, Assistant General Counsel and Global Director, Ethics and Compliance at Kennametal Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  24. 24. Looking Ahead: Technology and Compliance “Artificial Intelligence will open up new opportunities to automate standard processes, such as contract reviews. AI will also offer additional services like chatbots, which could be used as a potential compliance app. The big question to discuss is which corporate function should ensure that tomorrow’s AI decisions are based on values, guidelines, and laws? Due to its experience, it should be the Ethics and Compliance department!” - Patrick Henz, Compliance Officer for Primetals Technologies Source: Six Questions with an Ethics and Compliance Officer (SAI Global)
  25. 25. Looking Ahead: Culture and Compliance “After nearly a quarter of a century studying employee perspectives of ethics in the workplace, ECI has proven that if companies do not take the steps that improve their workplace cultures, conduct among employees will decline. In light of the worsening of two key indicators (pressure and retaliation), along with the status quo of organizational culture, trouble may be ahead.” - The State of Ethics & Compliance in the Workplace 2018 ECI Source: The State of Ethics and Compliance in the Workplace 2018 (ECI)
  26. 26. Looking Ahead: Compliance as a Differentiator “As the trend toward ever-escalating financial penalties for compliance violations continues to rise, one business reality is becoming clear. In the future, the most successful businesses will not only be the best at generating revenue, but also the best at compliance, so they can retain their profits by avoiding mega fines and other significant compliance sanctions like plant closures and forced product withdrawals.” – Patrik S. Florencio, Samuele Butera, and Erik Ramanathan, in Building an Ethical Culture: Why It’s Vital, How It’s Done, by the SCCE Source: Building an Ethical Culture: Why It’s Vital, How It’s Done (SCCE)
  27. 27. Six Questions: Class of 2017-2018
  28. 28. Six Questions with an Ethics and Compliance Officer is a series we started in September 2017 as part of our annual Compliance Officer Day celebration. The goal of these interviews are to shine the spotlight on different members of the E&C community, their personal achievements and professional journey, and give them an outlet to share insights with their peers.
  29. 29. To celebrate the one-year anniversary of this series and provide some inspiration to our community, we’ve commemorated all 18 of our interviews over the past 12 months in this book, Six Questions: Class of 2017-2018. It features Hui Chen, Melissa Stapleton Barnes, Seth Rice, Yan Tougas, Patricia Harned, and others who have committed to promoting ethical behavior, building their organization’s culture, and changing the perception of compliance. Download a Copy
  30. 30. We hope that the wisdom, experiences, and advice shared by these ethics and compliance professionals around the world will help you in your journey to building an ethical culture. If you’re interested in joining these individuals by participating in this series and sharing your insights, please email us today to get started. I’d like to participate
  31. 31. From your perspective, what does it mean to be a modern Chief Compliance Officer or E&C professional? Share your thoughts in our anonymous survey. Take the survey
  32. 32. #ComplianceOfficerDay is recognized globally every September 26 and was founded by SAI Global in 2016. To learn more about this day and access resources designed for the E&C community, visit www.complianceofficerday.com today.

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