October 16, 2015

Compliance Officers Call for SEC Enforcement Guidelines

On the heels of recent SEC enforcement actions against Chief Compliance Officers (CCO) and associated statements by Commissioners Gallagher and Aguilar and Chair White, the National Society of Compliance Professionals, a financial services industry trade group for compliance officers, sent this letter to SEC Director of Enforcement Andrew Ceresney requesting that the Commission establish policy that permits initiation of enforcement proceedings against CCOs only if they acted intentionally or recklessly – not negligently – to facilitate the underlying primary securities law violation.

See my earlier blog discussing the recent enforcement actions and internal SEC enforcement debate.

Access oodles of resources in our “Compliance Programs” Practice Area.

Survey: Compliance Officer Increasingly a Stand-Alone Position

This recent annual survey report from Deloitte/Compliance Week – reflecting input from over 350 multi-industry compliance professionals world-wide – generally reveals increasing acknowledgement of the importance of the compliance function.

Key results include:

  • 57% of respondents say their CCO reports directly to either the CEO or the board – the highest level in at least three years
  • 51% say the CCO has a seat on the executive management committee – up from 37% last year
  • 59% say the CCO job is a stand-alone position, compared to 50% in 2014 and 37% in 2013
  • 55% say they regularly brief the board on the company’s overall ethics and culture

Not surprisingly, financial services industry organizations are more likely to have larger compliance program budgets, larger staffs and standalone CCOs, and smaller organizations are less likely to have a designated or standalone CCO.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Most Common XBRL Errors
– Board Effectiveness: Role of Introverts
– Why Ds & Os Should Demand Indemnification Agreements
– Turnarounds: Tips for Maintaining a Long-Term View
– Information Security: Board Presentation Guidance

– by Randi Val Morrison