Building a horse and not a camel: The compliance committee

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by Donna Boehme

Years ago when I was still in-house, I was having a drink with The Oracle (who’s 99.99% right about everything) and I told him I was thinking of lobbying for a “compliance committee” in my company.  Instead of his usual encouragement, to my surprise, he responded with a scowl and a bark: “I hate compliance committees.”  Oh.

I know now what he meant.  To paraphrase a comment from a recent RAND symposium[i] on hot compliance issues of the day: “There are good [compliance] committees and there are bad [compliance] committees, and there are a lot more of the latter than the former.”

In a perfect world, a compliance committee (at the peer level of the CCO, not to be confused with the Board Compliance Committee, which has an important function of its own), can run like a well-oiled machine, a source of real-world grounding, peer input, access to resources, information-sharing, and critical support to the compliance program and the chief compliance officer (CCO) who leads it.  But how many of us live in perfect worlds?

More often than not, a committee that is conceived with all best intention evolves into something much less than ideal: (a) a team of micromanagers that routinely substitutes its judgment for that of the CCO; (b) a source of unnecessary red tape and “make-work” for the compliance function; or even worse, (c) a filter between the CCO and the governing body.

In a recent interview, a CEO of a large consumer products company boasted of “compliance by committee” and that he, the CEO, was the chief compliance officer.  Sorry, but in my book any CEO who believes himself the chief compliance officer of his company doesn’t really understand the job.  A dedicated, experienced, empowered CCO is every bit as critical to the success of a large multinational as a general counsel or internal auditor, neither of which I have ever heard a CEO claim to be.  But I digress.

Three rules for building an effective compliance committee:
1.   The compliance committee should have a clear, written charter that sets out the functionality, goals, and parameters of the group, along the lines discussed above.

2.  The CCO should chair a committee of her peers—senior level officers in a position to make decisions and marshal resources.

3.  The compliance committee should be periodically reviewed for effectiveness and adjusted as necessary to meet the stated goals of the charter.

Yes, every compliance committee structure should be fit-for-purpose.  But the guiding principles of a committee that helps and doesn’t hurt the overall compliance program are universal.  And if you are fighting this battle, remind your stakeholders of that old maxim: “A  camel is a horse designed by committee.”  Because in the race of compliance champions, you want your program to be a winning racehorse, and not a camel.


[i] 2013 RAND Corporation Symposium: Culture, Compliance and the C-Suite. May 2, 2013 Washington DC

Donna Boehme (dboehme @ compliancestrategists.com) is Principal of Compliance Strategists LLC and former Chief Compliance and Ethics Officer for two leading multinationals. Follow Donna on Twitter @ DonnaCBoehme.

1 COMMENT

  1. Having (a) been a compliance officer several times over and (b) rarely experienced a truly well-functioning committee of my peers, I have several times constituted a “Compliance Working Group.” This group was composed of nominees of the Compliance Committee members. I would require that members occupy org chart positions that gave them access to sufficient knowledge of what was going on their departments, and we would meet to discuss compliance concerns, actions etc. I expected them to report discussions to the committee members who nominated them. This enabled better discussion and “give and take” at Compliance Committee meetings because the Committee members had a “heads up” of what was going on, what the substance of discussion at the Committee meeting was likely to be, and what other department “lieutenants” had said. This meant less surprises in Commitee meetings, less defensiveness, and better discussion. It worked fairly well in a few instances, and not so well in others. The bottom line, I believe, is to get the right people in the room. And that takes trial and error.

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