5 Reasons Why you Should Hire a Chief Compliance Officer

3 mins

Non-compliance can cost organisations anywhere from $14 million to $40 million. This st...

JCW Resourcing

By JCW Resourcing

Non-compliance can cost organisations anywhere from $14 million to $40 million. This statistic alone would be enough to raise the eyebrows of most business owners and make them think about hiring a chief compliance officer. Despite this eye-opening stat being a viable reason for hiring a CCO, we understand you could do with several more reasons to help you recognise why you should hire a chief compliance officer.

So, in this guide, we will delve into our top 5 reasons why you should hire a chief compliance officer. But first, let’s define what a chief compliance officer is and what the role involves. 

What is a chief compliance officer?

Chief compliance officers (CCOs) are a core pillar, keeping businesses free from financial harm in a regulatory landscape becoming more complex as compliance risks grow. CCOs are executive-level professionals responsible for ensuring that a business's operations and processes comply with the relevant financial regulations, laws, and internal standards. 

A CCO will identify and manage any compliance issues that arise within an organisation and help mitigate the risk of a company breaching financial compliance laws and becoming vulnerable to a financial crime that could result in financial penalties, legal liability, and reputational damages. 

What does a chief compliance officer do?

As mentioned, the role of a chief compliance officer is to ensure an organisation works compliantly on a daily basis, abiding by the necessary financial compliance laws and regulations. But what does a chief compliance officer do day-to-day? 

Well, a chief compliance officer will typically spend their time developing and implementing financial compliance processes within a business, conducting regular risk assessments, and investigating and resolving any violations relating to compliance. 

CCOs will communicate compliance requirements and guidelines to employees in various departments across the business to ensure everyone understands the importance of compliance regulations, the consequences of a violation, and how to avoid any breaches. The chief compliance officer will also report to the organisation's chief executive officer and the company board to inform them of the latest compliance developments.

The duties of a CCO are vast, but to summarise, here are some of the main chief compliance officer responsibilities:

  • Design, implement, and optimise compliance processes and procedures for a business
  • Ensures a company remains compliant and abides by the necessary laws and regulations, as well as makes sure internal standards are followed
  • Carry out risk assessments and assess the areas where an organisation's compliance could be improved
  • Investigate violations or potential policy breaches and put measures in place to prevent them from happening or recurring 
  • Communicate with the chief executive officer and the board on changes to financial regulations and laws and how the business could optimise its existing processes
  • Liaises with regulatory bodies and agencies to ensure the business is operating in line with the necessary financial rules and regulations 
  • Train and inform the wider company of the latest financial compliance regulations 
  • Remain updated and have a deep knowledge of the latest financial laws and regulations

 Now that you know what a chief compliance officer is and what they do, let’s delve into the 5 reasons why your business should hire a chief compliance officer.

5 reasons why you should hire a chief compliance officer

There are many reasons why you should hire a chief compliance officer. From ensuring your business remains compliant in an ever-evolving landscape, helping to protect your organisation identifying risks to your company, and more, in this section, we’ll outline 5 of the biggest reasons to hire a chief compliance officer. 

1. Chief compliance officers ensure your business is compliant

One of the most significant reasons to hire a chief compliance officer is their ability to ensure your business is compliant. This has never been more important as the regulatory landscape constantly changes, and existing policies are often updated. With many rules and regulations your business must follow, ensuring you’re up-to-date with the latest compliance regulations can become daunting and time-consuming.

By hiring a chief compliance associate, you can rest assured that your organisation abides by the necessary laws applicable to your industry, including financial crime compliance regulations, being aligned with the Financial Conduct Authority (FCA), Anti-money laundering (AML), and Know Your Customer (KYC) to name a few. 

A CCO will ensure your wider business and all your employees have guidance on how to follow compliance regulations and how they can play their part in protecting your company. Chief compliance officers can also put policies and processes in place to help your brand maintain its compliance around the clock so you and your wider team can focus on what you do best in the comfort of knowing your business is compliant.

2. CCOs identify and mitigate financial and non-financial risks

While also ensuring your business is compliant, another reason to hire a chief compliance officer is how they can identify and mitigate financial and non-financial risks. What do we mean by financial and non-financial risks? Financial risks threatening your business are money laundering, fraud, bribery, and corruption. On the other hand, non-financial risks that can damage your brand could be anything from data breaches and threats to your compliance. 

You can hire a CCO to perform risk assessments to identify any vulnerabilities posed on your business, whether financial or non-financial. If your chief compliance associate discovers potential risks to your company, they can plan and implement policies to counter these threats.

Additionally, a CCO will develop policies to ensure your business is in the best position possible to prevent financial and non-financial risks; a CCO will report on the threats your business could become vulnerable to and the potential violations you could make unless you comply with specific regulations in a way that is simplified and easy to understand. 

A CCO will work closely with your internal staff to ensure the broader business maintains compliance at all times, and they will also liaise with your organisation's third-party partners and vendors to ensure they are not in a position that could result in financial or non-financial harm for your company. 

Ultimately, by identifying these risks in real-time and mitigating them before they can affect your brand, a CCO can go a long way to keeping your business free from financial risks, including fines and penalties and non-financial consequences like your sensitive data being exposed to financial criminals.   


3. Top chief compliance officers can protect your reputation 

We mentioned in our opening section the financial impact non-compliance could have on your business, but they are also essential to protecting your organisation's reputation. 

By helping your business comply with financial compliance laws and other relevant regulations, a CCO can help prevent regulatory investigations and enforcement actions from being put on your organisation. This can help to protect the company from fines, penalties, and other sanctions, which can damage your company's reputation.

Like the financial and non-financial risks we've discussed, these reputational damages can result in losing new business, existing clients, and other shareholders, as they will feel less comfortable being associated with your brand.

However, if you hire a CCO, the reputation you're trying to establish or have built over numerous years will be protected, and it could also lead to long-term growth and scalability for your organisation. How? You may be asking. Well, suppose your shareholders and new and existing businesses can see you have invested in and are protected by the resources of a chief compliance officer. In that case, they will feel more encouraged to invest in your organisation.

4. Chief compliance officers can build a culture of compliance

Another reason why you should hire a chief compliance officer is that they can enhance the ethical integrity of your business and ultimately help instil a culture of compliance across your organisation. 

Enhancing this ethical integrity to create a culture of compliance goes deeper than training your wider team on the latest regulations they should abide by and how to uphold compliance within your organisation; it's about setting the standards that your current and future employees follow to protect your business.

A COO can help establish a culture of compliance in your business by putting processes and guidance in place for your team to work with. Your chief compliance officer can communicate and lead by example, giving your employees examples and scenarios of compliance violations and emphasising the importance of maintaining compliance in a way that translates and is understood across the business. 

Strong CCOs will build relationships with your staff across all departments, highlighting the importance of compliance and keeping them updated with the latest policies and changes within the regulatory landscape. With this knowledge and understanding of the importance of compliance, your employees will pass this information down to the broader team and new starters, enhancing your ethical integrity while building a culture of compliance.

5. CCOs bring a wealth of expertise in financial crime compliance

One final reason to hire a chief compliance officer is that they will bring a degree of expertise in financial crime compliance that your business will have never had before. As a senior-level talent, a CCO will quickly gain an inherent and coherent grasp of your organisational vision and values and a deep understanding of your brand's broader market dynamics and industry regulations.

A CCOs duty goes beyond merely upholding the legality and ethics of your company's financial transactions; they play a crucial role in educating the entire business and establishing policies that guarantee the highest attainable level of compliance. 

Their wealth of expertise can be a valuable resource to you and your employees, providing guidance on compliance-related issues and putting strategic measures in place to prevent problems, ultimately giving you the peace of mind of knowing your business is operating compliantly.

Final thoughts

Overall, we believe the five points discussed in this guide are some of the most significant reasons you should hire a chief compliance officer, from ensuring your business remains compliant, identifying and mitigating financial and non-financial risks, protecting your reputation, and building a culture of compliance within your business to bringing a wealth of expertise in financial crime compliance

Whether it takes one, a combination of a few, or all five mentioned in this piece to help you see why you should hire a chief compliance officer is neither here nor there. What’s important is that you invest in a CCO to ensure your organisation operates compliantly, stays ahead of the curve, and remains poised for longevity. 

If you need more reasons and information on the importance of compliance, check out our 5 ways to improve your financial compliance strategy and why financial crime compliance is crucial for your business guides.

Looking for financial crime compliance recruitment support?

Are you a fast-growing business operating within the legal and financial services sector, in need of an expert chief compliance officer to assist in implementing crucial strategies for financial services compliance? If so, we can help. 

Our team of compliance recruitment specialists possess comprehensive knowledge about the financial market and boasts an unparalleled global talent network, enabling us to facilitate your business growth and keep you ahead in the competitive landscape.

Discover how we can cater to your recruitment requirements and strengthen your financial compliance strategy by contacting a member of our team today.