What are the Roles and Responsibilities of Compliance Managers and Committee?

Dec 21, 2021

Having a board-level compliance committee is now a standard in most organizations. Based on the regulation framework, processes, and internal structure, the role of these entities differs.

Compliance requirements vary, based on the industry, geography, and organizational goals. However, irrespective of the organizational design, a compliance manager or compliance committee plays an important role in helping the organization comply with relevant regulations and specifications.

They fulfill two highly critical purposes, which are: 

  • Overseeing daily operations so that the company complies with the laws and regulations applicable to the very nature of its business. 
  • Ensuring that the employees, officers, directors and other agents and associates adhere to the company’s code of conduct and other related policies. 

In the modern, shifting compliance landscape, it is critical that there be no lack in this regard, which is why most companies depend on a compliance committee. These professionals take care of external and internal compliance responsibilities with equal prowess. The role of a compliance manager and the compliance committee, however, is rather exhaustive. Read on to know more.  

What is a compliance committee?

The compliance committee for an organization is one that generally comprises the senior management and the Board of Directors. This committee is responsible for keeping an eye on the organization’s compliance efforts, both toward internal and external parties. Their purpose is two-fold and covers everything from preventive approaches to oversight and corrective action.

Some of the key members include the company’s operational leaders like the CFO, Directors, CIO, and the likes. All of these professionals have one thing in common, which is that they work towards mitigating risk across a range of operational functions.  

Who is a compliance manager? 

A compliance officer or manager chairs the compliance committee. Generally, the compliance manager works like a presiding officer, who is responsible for assessing and guiding the company’s compliance stance. The manager delegates duties, conducts meetings, drives compliance discussions, and spearheads initiatives that further the organization’s compliance goals.

Any duties assigned by this professional are based on the varied functions of the organization. Every department is responsible to adopt the policies and principles and tackle compliance management accordingly. All department heads then report to the compliance manager, whose job it is to consolidate this data and devise corrective actions and better compliance strategies.

Besides this, the compliance manager may be required to:  

  • Evaluate the efficacy of existing compliance systems.  
  • Offer guidance of the implementation procedures for compliance programs. 
  • Investigate compliance issues and follow-up as required.  
  • Review risk management priorities set by the board. 
  • Conduct audits, be it internal or environmental.  
  • Develop strategies for risk management.

How does the compliance committee function? 

The compliance committee functions at varied decision-making levels. The committee normally meets at regular intervals to discuss emerging compliance risks. Awareness is the top priority and is always high on the agenda. In terms of risk management, the compliance committee charts the progress of the organization and keeps it abreast with the changing times. Ensuring the organization is always on the right side of ethical and compliance law is the most important task undertaken by the committee.

The compliance officer or manager usually opens the compliance meetings with his or her findings on risk, fraud, and other regulation related topics. In some cases, they can insist on internal or external audits based on the efficacy of the current governance processes.  

Further, this team can devise plans on using compliance for marketing advantage and proactively dealing with risk factors. This includes considering the employee’s point of view along with activity screening to ensure that all action carried out binds with the company policies. Basically, the functions of the compliance committee are all-inclusive and it starts with identifying threats. Then, in a loop, they tackle policy and risk management for the various departments.  

Lastly, an action plan is proposed along with the topics up for review in the next meeting. This prepares the committee to work towards a bigger compliance goal in parts, within their individual roles and capacity. 

What is the responsibility hierarchy of a compliance manager and the compliance committee?

The compliance manager generally presides over the crucial meetings held by the committee. The main aim of these meetings is to identify risks and threats to compliance all across the organization. In some cases, the meeting can be called to take up function-related or incident-related compliance issues. For faster resolution, senior management linked to the function or department facing the risk may be assigned the duty to oversee and implement a policy change to remediate.  

For instance, in case of a cybersecurity issue, the Chief Information Security Officer may be asked to take the lead chair and discuss the extent of the problem. Next, they may be asked to highlight policy changes or the appropriate risk management measures. Whatever the situation, the compliance committee will offer suggestions and inputs for issues with the respective department heads present.  

To summarize, a compliance committee gathers the company’s operational leaders to evaluate emerging compliance risks, and subsequently, measure their progress on the prevailing compliance risks. It’s an irreplaceable mechanism to keep the whole organization on track towards compliance objectives and priorities. 

What are the factors to note when hiring or choosing a compliance manager?  

While the role of the compliance manager remains the same, irrespective of whether they are hired or are an employee promoted to the position, certain parameters must be considered. Apart from the academic background, which attests to their understanding of compliance, they should have excellent communication skills, both verbal and written. Ideal candidates should also have an analytical mind, complemented by skills such as excellent decision making and problem-solving.  

What are the crucial pointers to setting up a compliance committee? 

When setting up a compliance committee, the few things to note are:

1. Defining the team members: 

Members should be picked as per the compliance principle and policy of the company. Based on departments in operation, the employees involved in governance across functions should be picked as core members of the committee.  

2. Understanding the scope: 

Risk can sprout out from any corner of the organization. In fact, risk arises even when one single part of the organization fails to adhere to the set policy. When setting up this committee, consider the scope of work as a key factor. Underemphasizing the scope affects the efficacy of the committee and leaves the organization vulnerable.

A strong compliance committee does not merely exist to institute compliance norms but has a powerful presence in oversight. As such, the team should have the tools to continuously monitor the mechanisms put in place and report on these in a timely manner. Modern GRC tools like the VComply GRC suite work toward this objective by enabling seamless integration with the compliance program.  
 

With it, you can empower the compliance committee and the compliance manager by offering complete control over compliance efforts. The sophisticated tools eliminate siloed risk management, simplify remediation tasks, facilitate process automation, and reduce costs otherwise borne due to legacy systems. Together, VComply enables omnipresent monitoring for quick action, from any touchpoint. To know more, contact us online.

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