Business is revamping and opportunities are coming up after several months of a recession and lock downs. However, what did not change are the responsibilities and obligations of the Compliance Officers facing eager commercial teams and top management executives that want to recover the losses caused by this global pandemic.
Need to acknowledge, we know that regulatory compliance, in any organization, especially in emerging markets, is complex and it requires expert personnel for its execution and control.
We want to highlight the role of the Compliance Officer and, of course, all their functions, obligations and responsibilities within the international regulatory framework and top management putting some pressure in the revamping of business and business growth.
Roles and responsibilities
The Compliance Officer is the professional who manages risks with a high standard of integrity, commitment, leadership, effective communication, ability to persuade and inspire others in the organizations and third parties to do the right things all the time.
According to our global experience, the Compliance Officer has 6 essential responsibilities, directly involved in the agenda of the leadership teams:
1. Sustainability. Developing the ethics standard to sustain the business in the long run will allow the organization to always focus on the right track or “bright side of the force.", including the fight against bribery and corruption. It is the right balance between the aggressive growth and expansion plans and always doing the right thing.
2. Integrity culture. Provide or coordinate continuous training on compliance, including technological and innovation trends that impact the development and growth of the organization. Be responsible for the communication of the Compliance Program to employees, having to disclose any relevant information regarding compliance to companies and deliver the Code of Integrity or Conduct and the policies to which the staff and third parties.
Most likely, all hierarchical levels of the organization will see that the Compliance Officer will be responsible for:
· Provide or coordinate training in the field, which must be continuous, as well as reach each of the collaborators.
· Direct training according to each competency. That is, and for example, a training for the use of a whistleblowing channel should be global (for all areas), while a training in financial control issues will only be suitable for similar areas.
· Select appropriate learning systems for the different levels of professionalization within the company, including opting for technological e-learning tools specialized in compliance.
· Be a support figure in case of doubts, that is, present cases applied to the organization, such as the problem and resolution presented on previous investigations (with due discretion and confidentiality, according to the culture of the organization).
· Be an "arbitrator" figure to know how to proceed in certain cases.
The Compliance Officer is not the policeman; they are a strategic ally that supports organizations to make decisions aligned with the culture of ethics and integrity, always safeguarding the reputation and the work environment.
3. Accountability. Perform periodic compliance audits on business partners and third parties to check that business operations and practices are in accordance with the standards and policies of the organization and regulatory framework.
Always, the Compliance Officers, are providing advice to the organization on compliance matters, keeping the balance between the growth of the business maintaining the reputation of the organization with sustainable strategy.
4. Risk Management. Identify the obligations and risks (continuous exercise) to which companies are subject, both from the point of view of regulatory risks in accordance with the operation and the legal framework that the organization is subject to, as well as those guidelines derived from codes, internal policies, and procedures. This means, the Compliance Officer must clearly and objectively identify the different obligations and risks to which organizations will be subject. Thus, they will not only dedicate themselves to the observance of the law and its risks in accordance with the operation, but also to all the internal codes that will regulate each one of the business processes.
5. Controls and monitorship. Implement management indicators and controls that allow to manage and know in a timely manner the materialization of the identified risks derived from its relationships with clients, suppliers, distributors, and external sales representatives, and even lead the analysis of reputational risks and vulnerabilities in the merger and acquisition processes of organizations.
The Compliance Officer must identify and address any risk related to the regulatory framework that the organization is subject to, including those derived from relationships with customers, suppliers, distributors, commercial and various organizations. Also, other relevant aspect should be considered as part of the risks management:
- Discrimination and harassment.
- Data protection and privacy.
- Human rights and organizational culture focused on sustainable and sustainable development.
- New tax measures and generation of business plans that do not expose any fiscal and reputational risk to the organization.
- New technologies, digitalization, innovation, social networks and, of course, their consequent need for training and learning.
Notice that organizations should have a clear awareness of "social" risks which in terms of public image may impact the reputation, among other risks highlighted.
6. Openness and transparency. Establish and lead autonomous and independent complaint mechanisms for the organization's staff and third parties and guarantee non-retaliation by means of a comprehensive investigation (consider specialized external advice) to always detect the root cause to eradicate other people´s behavior to the culture of ethics and integrity of the organization.
Therefore, when someone inside or outside the organization is not aligned, violent or fails to comply with internal policies and procedures, an investigation must be carried out – internal or advised by specialized externals. That said, the Compliance Officer should keep in mind that:
· The whistleblower can be anonymous or give his name and that he can belong to the organization or a business partner.
· There is no retaliation, whoever it was, that, if someone from senior management, middle or operational management, whether it is key to the organization.
· The investigation of complaints, of any kind, must be conducted with absolute autonomy and independence or consultants by experts in the field.
· An effective plan should always be established that allows to always find the root cause on the allegations.
· Be clear about the objectives and sanctions that should be applied according to the findings of the investigation.
Compliance: the strategist and advisor to the organization
The Compliance Officer must be an advisor in global compliance matters, because although it may be that he does not have the expertise in all the areas involved, it will be his duty to surround himself with a multidisciplinary team, independent of the training that he or she has, whether internal or external, that advises him in any matter, so that he can give you accurate answers.
The same will apply in its contribution to develop the descriptions of the Compliance obligations that are inherent to each area or position within the company and can be used as objective parameters in staff performance evaluations.
The Compliance Officer is a leader immersed in different areas and issues. Throughout the organization there are possible risks, frauds, corrupt acts, and dangers that violate the organization policies and procedures all the time. However, organizations are in the mist of the revamping the global economy and new Compliance risks are arising.
The role of the Compliance Officer must be more proactive and strategic; although, if there are issues and allegations to be investigated, the Compliance Officer, supported all the time by top management and external experts, must find the root-cause of the issues and establish a remediation plan.
Business growth is key, more complex in emerging markets, but understanding the market dynamics and risks is a journey that need to be supported by the Compliance Officer. Yes. There is a need to revamp the global business, but without understanding the Compliance challenges and implementing a compliance program, then expect possible economic and criminal sanctions that your organization is exposed to and can have a significant impact, including the organization's reputation.
Our specialty is to advise proactively (Risks and Compliance) and reactively (Investigations) needs and become the support of the Compliance Officer that your organization always requires with excellence, especially during the operations and expansion in emerging markets.
Author: Fernando Cevallos, CEO and Founder of F&C Consulting Group.