Compliance and the Board

Compliance and the board


Disconnected compliance functions are a proven fast track to corporate scandal. Just look to Volkswagen, Enron and the countless other companies with the scars of compliance scandals forever tied to their name and degrading their reputation.

Despite the growing list of examples, disconnect continues to trouble businesses with compliance vulnerabilities still present across various sectors. With operational priorities still failing to include compliance and ethics according to the leading Compliance Officers across global organisations, it is obvious public statement and internal, operational priorities are misaligned.

When it comes to board oversight of compliance programs, it is the job of the Compliance Officer to impart the value of compliance and ethics to the board. This begins with a two-way, open relationship.

Board Reporting Best Practice

When dealing with the board, customised, summarised reporting with an ongoing reference to strategy is needed. The highest value information to board members is information that has been translated into actionable business strategy. This leaves it the job of the compliance officer to vet content and look beyond ‘compliance’, ensuring only the crucial information is included in their board reporting.

Overcomplicated reports run the risk of being ignored by the board. Presenting board members with too much or irrelevant information can lead to them becoming overwhelmed, desensitised or disengaged from the report and its contents. To avoid this, reports need to be vetted, analysed and succinct.

This reporting should also include risk. Effective compliance takes a company-wide scope which calls for risk considerations. This reporting can be considered the first point of conversation, with the board and the risk team, but should not be the only conversation had.

Developing Healthy Board Relationships

Successful compliance programs practice an open dialogue between their Chief Compliance Officer (CCO) and their board. Boards that see success are engaged and educated to take control of their compliance strategy. To achieve this level of ownership and control, external education may be necessary for board members to build a deeper appreciation of compliance’s function.

Through such relationships, CCO’s are able to refine their board reporting to provide more insightful content. With open dialogue and engaged boards, Compliance Officers have found board buy-in shifted their compliance programme from reactive to predictive and the wider business strategies driven further. This top-down support should not be overlooked and is best captured through regular, formal interaction between the board and CCO.

Finally, with its direct links to both financial performance and longevity, a company’s culture is regarded as the intangible asset of greatest value and should be championed by the CCO.

In working collaboratively, effective compliance functions influence their board and can gain genuine buy-in. It is only with this buy-in that companies will see their overall policy and compliance in alignment and their company longevity strengthened.


When the above is actioned, disconnected compliance functions will be eliminated along with the run on possibility of those reputational and financial consequences. Those working in compliance at all career levels should consider this board buy-in a top priority for their career longevity.


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