Compliance Professionals' Role Expands - Survey Finds Little Or No Job Security Offered

Monday, January 3, 2011 - 01:00

The expanding role of compliance and ethics professionals clearly places them in a high-risk position, yet they enjoy scant protection when it comes to job security or severance, according to the findings of a recent survey conducted during the fall by the Society of Corporate Compliance and Ethics (SCCE) and the Health Care Compliance Association (HCCA).

Under provisions in the U.S. Sentencing Guidelines that went into effect on November 1, 2010, organizations may now receive a reduction in fines and other penalties even if senior executives are involved in the wrongdoing. However, to obtain that reduction "individuals with operational responsibility for the compliance and ethics program [must] have direct reporting obligations to the organization's governing authority or appropriate subgroup thereof."

This latest change, while providing governmental encouragement for the compliance office to have a direct line to the board and thus elevating the importance of the compliance professional, also raises the risks for compliance and ethics officers.

Serving as a chief compliance and ethics officer requires a great deal of integrity and the willingness to ferret out wrongdoing wherever it may occur. That can, at times, include taking on senior executives and challenging well-established business practices.

"This puts the compliance and ethics officer at risk for termination, or may call for him or her to resign," explained Mr. Snell. "The survey found that just 29 percent of compliance and ethics professionals have any severance packages at all. To act in a truly independent manner, more compliance and ethics professionals will need severance packages."

In addition, there has been a growing movement, led in many ways by the U.S. government, to move compliance out of the general counsel's office and make it a separate function. Such has been the case with several high-profile settlements. The survey revealed that, generally speaking, compliance is already located outside of the general counsel's office, except in publicly traded companies. And, in those organizations where it is currently a part of the general counsel's office, "there are typically no plans to move it elsewhere," said Mr. Snell.

To review the complete survey, visit http://www.corporatecompliance. org/EvolvingRole.