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Alexis Phillips

The core duties and responsibilities of a Compliance Officer (CO) are complex, while constantly evolving, meaning that theirs has become an integral role within financial services. In fact, the role of a CO covers a distinct skill-set in which a niche range of specific traits are required to thrive within it and be effective, regardless of the sector which they are operating in. Here, we invited a selection of Compliance thought leaders to share their experiences around the personal and professional qualities which help to shape the most successful COs.

Understand your business and be visible within it

It is essential for a good CO to fully comprehend all the nuances and principles which lie at the heart of the business which they work within. They need to be both present and visible, while getting to grips with and understanding their firm’s strategic positions, competitors, aspirations and goals.

Only when this has been ascertained can a CO begin to gain the trust and confidence of top management and colleagues alike and work with them effectively to achieve those aims to achieve the desired results.

It is also important that a CO builds on his or her expertise and that each member of their team or department has clear knowledge. This is so they are able to truly understand the principles of often complex Compliance rules and regulations and what they are intended to do, especially across their field of interest or specialism.

This is because such regulations can prove to be a minefield and it is the job of a CO to make sense of them and explain them in a way which the wider business is able to understand.

On a deeper level they need to know what is too much risk all while thinking about how they would defend both their own and the company’s position with the regulator should the circumstance arise.

With that in mind, a keen eye for detail is vital in this sphere and COs need this quality, possibly more than those in other more senior or director level roles. Without doubt, there is an expectation with a CO that they can switch between delving into the detail and thinking strategically.

This is precisely why a good CO will never simply say “no” when a tricky situation emerges. They instead try to reach a solution, which is a further reason why good business knowledge is key. This is because they understand that the job is about managing risks for their own firm and that processes should not be carried out for the FCA alone. A good CO talks in outcomes, for both customer and business and rarely quotes specific rules.

Exercise commerciality and sound judgement

It is important that COs listen and observe, taking the time to sit among operational teams across the entire organisation on a regular basis, while asking themselves “what would the regulator think if they heard this conversation?”

COs should take any findings to managers with the intention of resolving any given predicament. It is often the case that teams want to get things right but lack the basic tools, such as resources and sufficient depth of regulatory knowledge, which can make the Compliance arena difficult to navigate.

It is also always best to avoid over complicated ways of working, instead taking the time to ensure that internal processes are made more simple. The easier the policy or process is, the more likely people will adhere to the correct methodology, ensuring consistency across the wider business.

The ability to display astute skills and judgement is required in order to apply a principle-based rule book to commercial operations, which will help guarantee that objectives are both met and complied with.

COs should take a flexible approach to working. The reason why is because, based on a particular situation or the maturity of an organisation, a CO will be expected to adapt their approach accordingly. This switches between the more traditional “policeman” style approach, which should be adopted when a red line has been crossed and a more consultative style for mature organisations where an opinion can be offered on the expectation that the business will take the appropriate action.

COs should always be forward thinking and aware of the wider market context. By using their crystal ball wisely as it were, a great CO can protect the business from potential future regulatory threats. However, they should be careful about over using their crystal ball to predict the future and keep revisiting the regulatory horizon, working with the business to ensure it considers this as part of its strategic development but be careful to caveat that things can change.  Taking steps to keep the business updated and be realistic about the real risks will help to achieve success.  

COs should base their actions on substance over style and form, by making a situation “right”, rather than passing it off as outwardly impressive with no real basis for doing so. By way of example, sustainable profit needs to be based on a consistently solid foundation.

A deep understanding of the technical application of rules and the ability to use that to advise as an equal partner in the corporate strategy is a necessary skill for a good CO. There is little point in making money for a business, only for this to be put at risk of scrutiny by the regulator, on account of not being properly compliant.

COs need to have a creative streak and be able to look at a situation in a variety of ways to ascertain the correct angle to take to meet the highest standards of Compliance.

They should have the presence of mind to tell someone not to worry about the finer detail as it is their responsibility to regulate the situation. They should then be capable of explaining it with a level of clarity which shows that they know what they are talking about and have the conviction to document it to be able to prove it week after week.

Listening skills are essential and a CO needs to hear the brief and deliver it. This is because Compliance work is an expensive investment for an organisation and a lot of people do not take time to listen to what they are being asked to do.  If a CO is solving an issue for the business against a commercial objective and gets it wrong, the firm will ultimately suffer.

COs should project humility, starting from a position of complete incompetence to gain the understanding required to navigate the situation properly and to find worthwhile solutions.

It is also essential to think on a commercial level to generate credibility when providing advice. Exercising pragmatism and displaying a proportionate approach are both qualities which should be encouraged in order to achieve this.

Exercising good judgement is vital too. It is not how a CO finds and quotes the rule, it is how they interpret and consider the spirit of that rule or the principle of it. It is how the CO then communicates this to their business partners and influences them to do the right thing, maintaining courageous integrity throughout and supporting them through to a conclusion.

Learn resilience

A CO’s mantra should be to go above and beyond. Being au fait and up-to-date with Compliance standards and rules is the minimum requirement of the role. A firm has choices relating to how it will comply and a good officer can add value with not only their regulatory knowledge, but by applying practical thinking. Taking the time to understand the business’s functions, objectives, purpose and values is a good place to start.

It is important to know how to be part of the answer, not the problem. It is a fine line to balance, but being part of the business and having commercial and marketing teams know that the CO is on the same team as them is crucial. They should work with the business when things go wrong and not hold departments to account around the boardroom table. A CO should not be afraid of sharing experiences that may have gone wrong, but ensure that either the board or risk committee can see that both the Compliance arm and the business are aligned with both the finding and the management response.

Having a plan in place is good, but do not be afraid to change it. It is not always possible to complete all required Compliance activity, however strong the intention is. A realistic activity plan should detail what may and may not be achieved over a given period and be aligned with the risk plan.

Resource levels should be managed to ensure the plan can be delivered, monitored and its progress recorded. Take note though that things might not always go according to plan. Whether it is down to unplanned business activity or regulator engagement, do not be afraid to go back and revisit the plan and make changes where required. Always think about how this might look to the regulator and always obtain executive or board visibility and approval for any changes.  

If the advice is not accepted, then adopt a thick skin and ensure that the business’s decision makers understand the consequences of their actions. It is vital to work with conviction, basing work carried out on positive assurance, which is tested and found to function well, rather than negative assurance, as in nothing has gone wrong so far so it must be fine, which is not always the case.

The ability to accept often negative feedback will help to build overall resilience. The inherent nature of the job is to identify weaknesses, risk and potential threats. Naturally, a good CO will always see opportunity and should provide options, but invariably the feedback will be knocked back to an extent, meaning that it is back to the drawing board to find a new solution.

Consistency is also key as there is nothing worse than being contradicted at every turn or giving up when challenged. Good knowledge, coupled with the ability to position advice with all levels of stakeholders, generates trust and inclusiveness.

Hire well and bring people on your journey

Never underestimate the power of a strong team, whose members bring different skills and qualities to the table. A team with the right blend of technical skill-set and personal attributes can be invaluable for a CO.

Exercise due diligence and foster a culture of “should we” rather than “can we” among senior management so that avoidable mistakes are not made. It is this level of attention to detail which makes businesses successful.

Cultivate Compliance knowledge among the entire first line management team to avoid having to address each and every query. This will enable a CO to focus on what they do best; addressing the core day-to-day duties which their role demands.

A good CO possesses the ability to bring a dry subject to life by adopting non-jargon or regulatory language and terms of phrase. Instead, they need to talk in terms of the language of the business.

Establish good relationships which are mutually beneficial so that a good approach to being compliant stretches across an entire business, rather than being compartmentalised among one team.

A CO should demonstrate true passion for and dedication for the subject and that they clearly understand the commercial value which good Compliance standards bring to a business. This will also do wonders when boosting a firm’s reputation among key stakeholders and investors.

The ability to engage is vital as Compliance can be a dry subject so winning hearts and minds remains key. Compliance is a complicated job and it is possible, all too often, to get caught up in minor details around legislation and regulations. Having a good sense of humour when the task in hand appears impossible will always help.

As a leader, a CO should ensure that their teams know how what they do aligns specifically to the overall business strategy. Developing a strong approach will help build that often tenuous link between Compliance activity and business objectives. Talk about the strategy with peers and ensure that the Compliance team does the same with theirs.  The more a strategy is talked about, the more people will understand and support it, helping to guarantee success.

Compliance officers need to be compatible with everyone so that they can explain their purposes and objective to non-Financial Services workers. They also need to flex integrity, by being clear, transparent and following the rules to fully support the business they work for.

Ultimately, a good CO is highly skilled in the Compliance arena and the best ones are calm, thoughtful, intelligent, tenacious and principled. If you would like to find the perfect CO to meet your business’s Compliance requirements, please get in touch with our specialist team at MERJE: info@merje.com

We would like to thank the following Compliance experts for their generous contributions and insights which have helped to shape this article:

Michael Billington, Compliance & Risk Director

Steven Peacock, Chief Risk Officer, Think Money

Richard McKenzie, Director of Risk & Compliance at StepChange Debt Charity

Mark Din, helping businesses with customer outcomes focused Risk & Compliance solutions

Bernard Conlon, Risk and Compliance Director/CRO at Studio Retail Group Plc

Kelvin Clough, Head of Compliance at Brown Shipley & Co

Julian Davenport, Chief Risk Officer at CarFinance247

Louise Tipping, Chief Compliance Officer for Together Money.