Hey CCO…Do you have enough authority to get the job done

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In this year’s survey of compliance trends published in Compliance Week, Deloitte LLP found that the tide is turning (slowly). “The prevailing direction for modern corporate compliance functions is clear: more authority and stronger organizational support for effective compliance programs.”

When the CCO speaks…management listens

Out of 364 respondents, 57 percent say the Chief Compliance Officer (CCO) reports directly to the Chief Executive Officer or Board of Directors. A majority sit on the executive management committee and regularly brief their boards.

This is a big change from five years ago when Deloitte launched its survey.

What it means is that more CCOs are taking a seat at the table, and they are participating in high-level conversations about corporate strategy, corporate values, and corporate culture.

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But preaching compliance to the masses is still a challenge

According to the Deloitte survey, issues still remain. Spreading the word and inculcating a culture of compliance throughout an organization remains a challenge. Regardless of how much a part they are of a firm’s “inner circle,” CCOs still face enormous challenges in rallying the troops into a strong, transparent, risk-intelligent organization.

Just because one has the ears of senior management doesn’t mean the rest of the firm is paying attention.

It’s all about focus

According to the survey, the three most common CCO responsibilities are:

  • compliance training;
  • code of conduct; and
  • the whistle-blower hotline.

Conversely, most CCOs find records management, relationships with regulators, and even culture assessment among the least attractive of their responsibilities. Makes you wonder how FINRA and the SEC feel about that…

CCOs also complain that third parties continue to be their single biggest worry:

  • 42 percent of CCOs Deloitte surveyed say they always audit compliance with policies or regulations;
  • 38 percent always perform extensive background checks;
  • 32 percent always require training or certification.

But who’s keeping track?

Good question.

Deloitte’s survey revealed that most CCOs are not terribly confident in their IT systems’ ability to do the job — but this lack of faith likely is more of an IT system-related disconnect. Regardless of company size, most CCOs reported using desktop software or internally-developed tools and had to cobble together data from other departments and business units into one package for later analysis (and…for review by the regulators!).

Sometimes the best in-house solution is to outsource

Deloitte’s survey reported CCOs and their teams still spend “a disproportionate amount of time collecting data, versus time spent adding strategic value to the business through analyzing and trending the data collected.” CCOs are spending this “disproportionate amount of time” because they don’t have the right processes, programs, or systems in place, and they haven’t automated those processes, programs, or systems.

So let’s talk (212-233-1155)…

We’ve got a comprehensive regulatory archival and compliance solution specifically designed for Broker/Dealers, RIAs, and FCMs. It’s called Patrina and it’s got one goal: Compliance.

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