In nearly every professional industry, compliance with regulations pertaining to safety, human resources and due diligence concerns is a crucial element of basic risk management. As a result, many mid to large sized businesses appoint one or more compliance officers to ensure that every element of their business operations is in compliance with governmental and internal regulations. Although approaches to compliance management may differ, a compliance officer is primarily entrusted with creating and enacting company-wide best practices that are built around regulatory compliance. With well trained and proactive compliance officers following up regularly on best practice procedures in their company, business managers can concentrate on the day-to-day operations of their company and big picture projects.
Some businesses go so far as to hire a chief compliance officer whose sole duty is overseeing regulatory compliance issues and ensuring that employees are following internal procedures and best practices. As such, a chief compliance officer often acts as a kind of corporate responsibility officer who is responsible for stepping in when managers and employees are tempted to cut regulatory corners. In an ideal corporate environment, it is generally understood that the chief compliance officer is required to make prudent judgment calls that are in favor of regulatory compliance even if these best practices have a negative impact on a company’s immediate bottom line. As a result, chief compliance officers can help a corporation avoid costly scandals and lawsuits down the line, such as harassment or accounting scandals.
A compliance officer is also an essential part of ensuring corporate integrity in a corporation. Due to a public company’s duty to work towards providing a profit to its shareholders, many business managers and employees find themselves facing ethical gray areas in order to increase profitability. A compliance officer can take some of the moral burden off of management and staff by instituting best practices that provide clear cut directions for employees to follow. In the long run, the best practices that are managed by a compliance officer provide employees at every level of a business with a very clear understanding of what is acceptable behavior in the workplace.