WHAT IS A Compliance Officer

Compliance officer refers to an individual who ensures a company complies with its outside regulatory requirements and internal policies.

BREAKING DOWN Compliance Officer

A compliance officer is an employee of a company who helps that company maintain policies and and procedures to remain within an industry's regulatory framework. The duties of a compliance officer may include reviewing and setting standards for outside communications by requiring disclaimers in emails or examining facilities to ensure they are accessible and safe. Compliance officers may also design or update internal policies to mitigate the risk of the company breaking laws and regulations, and lead internal audits of procedures.

A compliance officer must have a thorough knowledge of the company and an awareness of where possible regulatory breaches may occur. It is essential that the compliance officer effectively communicate the company’s key ethics principles and compliance regulations. Compliance officers organize regular training sessions for employees to communicate key regulatory changes and updates. This is particularly important in a heightened regulatory environment where change is constant. The compliance officer must work with business units and management to ensure appropriate contingency plans are in place that set guidelines on how to respond to a possible compliance breach.

Skills of a Compliance Officer

A compliance officer requires a unique skill set to ensure a company’s operations fully comply with regulations and procedures. It is critical that a compliance officer possess high ethical standards and honesty as this individual is responsible for ensuring a company adheres to required regulations. Compliance officers continually review the work of others, therefore it is essential they have polished people skills and work well with colleagues. Compliance officers need to be reliable, showing commitment and unity in relation to a company’s regulations and procedures, and it is crucial they demonstrate this to colleagues, leading by example. Compliance officers must also have strong attention to detail. They need the ability to notice actions that may result in a liability.

In the event of a regulatory breach, it is important for the compliance officer to have appropriate disciplinary measures in place to avoid a future recurrence. It is the compliance officer’s duty to ensure continual monitoring and review of compliance procedures to help identify possible areas where improvements could be made. Compliance officers are expected to provide an objective view of company policies. Influence by other employees, including management and executives, to overlook infractions may result in significant fines or sanctions that may lead to financial loss or even business closure. Larger companies typically have a chief compliance officer (CCO) to direct compliance-related activities.