The structural manifestations put the corporation and its employees at ease that compliance and ethics are being covered when the manifestations are actually ineffective at creating real change and, indeed, have been identified as the weakest part of the ethical infrastructure of an organization. The compliance officer should be a member of senior management and report directly to the CEO. . 443-481-4584 Departmentalization, therefore, might decrease the level and type of influence the GC has in the corporation, an influence that has taken more than 30 years to cultivate. The reporting structure of any compliance personnel employed or contracted by the company. Should there be a specific department led by a chief compliance officer within the company hierarchy? Instead, a culture of compliance needs to be created not just from the top down, but throughout the organization. Yet departmentalization—like codes of conduct, revisions to mission statements, and formal training programs—is merely a formal exemplification or structural manifestation of a commitment to compliance. 00011247-1 Annual Compliance Report to Board of Directors [DATE] Dear Sirs and Mesdames: As you are aware, National Instrument 31-103 - Registration Requirements, Exemptions and Ongoing Registrant Obligations (“NI 31-103”) requires that I, as hief Compliance Officer, provide [FIRM]’s (the “Company”) oard of Directors with an annual report concerning my assessment of compliance by the The answer likely depends on the perspective of the questioner. Ultimately, a focus on culture and informal norms may have more potential to meet the public’s objectives than a focus on organizational structure. In other words, the WME firms offer a glimpse of what other firms might aspire to do. Corporate clients have opted for a variety of different reporting lines for the role of General Counsel (GC). People do not necessarily recognize an ethical dilemma as an ethical dilemma when it is presented to them. He must also inform the Board about important issues and material violations. The automaton – The automaton role is about building policies and procedures, training and testing employees on specific regulations and obligations, and monitoring adherence. the chief legal officer (CLO), or even the chief financial officer (CFO). In other words, how people classify a decision affects the decision they make. On staffing levels, a huge different exists (understandably) between highly regulated firms and everyone else. Organizational Structure Options • Centralized – The compliance department has more employees who report through the Chief Compliance Officer and are responsible for overseeing and implementing the compliance and ethics program. The decision to sell Pintos despite evidence that the vehicles would cause accidents resulting in death was couched as a “business decision” made for financial reasons. Now we have this report, showing that more CCOs among this group have input into strategic issues. My question is how much these answers about strategic input correlate to better, higher-level reporting relationships. Research studies have consistently shown that open environments and information exchange among people with different experiences, roles, and expertise enhances problem solving. Another example is the Ford Pinto. The secretary can come in late, but they can’t come in late. Should they have legal, management, or other training like psychology, sociology, or organizational motivation? As one CCO interviewee explained, “A lot of times I will retain counsel to advise me or to help make sure that the work can be privileged.” After departmentalization, the corporation gets the same benefit without the costs. This one examines job titles, reporting relationships, and staffing. So, back to the question, What’s wrong with that line of thinking? Thus, the risk is that an economic incentive can induce people to choose the quicker road over the higher road. Instead, it is a practical, economic decision based on a cost-benefit analysis. The investigator – In this role, the compliance officer is someone who openly searches to uncover noncompliance and is looking for the hidden risks. Board engagement, training and reporting is a critical but often overlooked area of practice for the chief ethics and compliance officer (CECO). Predictable tensions can arise between CCOs and CLOs over authority and responsibilities in any compliance structure. Compliance is not part of the law. These blind spots occur when there are functional boundaries within an organization that enable decisions to be labeled and segmented as something other than ethical ones; for example, a decision is viewed as an engineering, marketing, or financial decision. Should the compliance and ethics department be separated from the legal department entirely? In October 2016, the SEC fined and censured a registered investment advisor for failing to conduct required annual compliance reviews and for appointing a chief compliance officer … Very rarely [does] the compliance officer report to a CEO because that’s what the CEO wants. Compliance Hotline: 443-481-1338; Email: compliance@aahs.org; Mail: Compliance Officer, 2001 Medical Parkway, Belcher Pavilion, Suite 203, Annapolis, MD 21401; Deneen Richmond: Chief – Quality, Patient Safety & Population Health Officer – Luminis Health. the right thing sometimes is more than the legal thing.” But, when it comes to identifying who is in charge of the corporate conscience, who is the creator of the corporate ethical culture, who is supposed to tell senior management what they “should” do versus what they “can” do, there is major disagreement between GCs and CCOs. Although consistent with some forms of practice, such an attitude is the opposite of the way most GCs view their role, which is one that includes being responsible for gatekeeping, creating culture, and protecting the corporate conscience of the company. Chief Compliance/ ERM OfficerChief Dianne Judge Public Affairs DirectorVice President Julie Hopsital Liss-Katz ... III. 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