I found the article “Compliance Officers Need More Clout” in Human Resource Executive Online interesting.
A company’s Chief Compliance Officer (CCO) is responsible for making certain the company obeys all applicable laws and operates ethically.
However, this sets up obvious conflicts. According to CEO of Sterling Management Kevin Wilson, CCOs are not being given the knowledge, authority or power within the enterprise to prevent violations.
The CCO must also be aware of possible issues. I cannot believe Kenneth Lay the CEO and Chairman of Enron would have listened to anyone telling him he should not carry out extensive financial fraud. The auditors turned a blind eye to it. What could a CCO have done to prevent that company from collapsing?
The recent emissions-software issue at Volkswagen demonstrates ethical violations still happen. And when they are caught, they can have a financially devastating effect on the company. Unlike Enron, Volkswagen will survive, but it will take years and lots of effective engineering and marketing to repair the damage to its brand name.
In the long run, saving a little money by cutting a legal or ethical corner can cost a company millions of dollars.
In that context, it’s perhaps indicative that CCOs earn so little money. According to the Bureau of Labor Statistics, their average salary is just $64,340, far below CEOs and other upper management. Just by itself, this figure proves companies don’t give CCOs enough authority or respect.
Helane Morrison, CCO of Hall Capital Partners LLC stands in contrast to the image of ineffectual CCOs.
Morrison has a long history of working in the field of investment and securities enforcement. She entered private legal practice at the firm of Howard, Rice, Nemerovski, Canady, Falk & Rabkin in 1986. She made partner in 1991. Helane focused on business litigation, private securities actions, and SEC issues.
From 1996 to 1999, Ms. Morrison was the head of enforcement for the SEC, San Francisco office. This is particularly significant because it includes Silicon Valley.
From 1999 to 2007, she served as Regional Director of the SEC for Northern California and the five Northwest States. She was responsible for the enforcement of securities law and litigation in that entire area.
In addition to serving as CCO of Hall Capital Partners, Ms. Morrison serves on the hedge fund subcommittee of the American Bar Association. She speaks on compliance and legal issues affecting investment advisers and funds. Learn more about Helane by connecting with her on LinkedIn.