Why do you need to hire a compliance officer and what does he do for the company?

Updated: Nov 15, 2021

A compliance officer is an employee of a company who ensures that the company complies with its external regulatory and legal requirements as well as internal guidelines and articles of association. The Chief Compliance Officer is usually the head of a company's compliance department.


Compliance officers are obliged by their employer to work together with management and employees to identify and control regulatory risks. Their goal is to ensure that an organization has internal controls that adequately measure and manage the risks to which it is exposed. Compliance officers provide an internal service that effectively supports the business units in their duty to comply with relevant laws and regulations as well as internal procedures. The compliance officer is usually the company's general counsel, but not always.


The central theses

A compliance officer is a person who ensures that a company complies with its external regulatory and legal requirements as well as internal guidelines and articles of association. Compliance officers are obliged by their employer to work together with management and employees to identify and control regulatory risks.


In the event of a rule violation, the compliance officer must take appropriate disciplinary action to avoid future repetition.


How compliance officers work

A compliance officer is an employee of a company who helps that company adhere to policies and procedures to stay within the regulatory framework of an industry. A compliance officer's role may include reviewing and setting standards for external communications by requiring disclaimers in emails or reviewing facilities to ensure they are accessible and secure. Compliance officers can also draft or update internal policies to reduce the company's risk of violating laws and regulations and lead internal audits of procedures.


A compliance officer needs to have a thorough understanding of the company and where potential regulatory violations may occur. It is important that the Compliance Officer effectively communicates the company's key ethical principles and compliance rules. Compliance officers organize regular training for employees to communicate important regulatory changes and updates. This is particularly important in a tightened regulatory environment in which changes are constantly changing. The compliance officer must work with the business units and management to ensure that appropriate contingency plans are in place that set guidelines for responding to a potential compliance violation.


In the event of a rule violation, the compliance officer must take appropriate disciplinary action to avoid future repetition. The compliance officer must ensure continuous monitoring and review of compliance procedures to identify potential for improvement.


The compliance officer is expected to provide an objective overview of the company guidelines. Interfering with other employees, including management and executives, to overlook violations can result in significant fines or penalties, which could result in financial loss or even company closure. Larger companies usually have a Chief Compliance Officer (CCO) who leads compliance-related activities.


Compliance officers play an active role in managing a company's risk and reducing financial crime.


Become a compliance officer


A compliance officer requires unique skills to ensure that a company's operations are fully in compliance with regulations and procedures. A compliance assistant must have high ethical standards and honesty as this person is responsible for ensuring that a company is complying with the required regulations.


Compliance officers are constantly reviewing the work of others, so they must have strong human skills and work well with colleagues. Compliance officers need to be reliable, show commitment and unity to a company's rules and procedures, and they must show this to colleagues and lead by example. Compliance officers also need to have a high level of attention to detail. You need to be able to recognize actions that could lead to liability.


A position as a compliance officer or manager is usually not viewed as an entry-level position. Bachelor's degrees are usually a minimum requirement, and some employers may look for advanced degrees, such as a law degree or a master's degree in business administration (MBA), particularly to qualify for a senior position.


Compliance officers in other sectors have the opportunity to complete the Certified Compliance and Ethics Professional Program (CCEP) through the Society of Corporate Compliance and Ethics (SCCE). The CCEP requires participation in an intensive preliminary course and successful passing of an examination. Similar naming and certification courses are available through the Ethics and Compliance Officer Association (ECOA).


According to 2016 BLS statistics - the latest available at the time of this writing - annual salaries for compliance occupations range from $ 37,630 to $ 105,206 and hourly wages range from $ 18.09 to $ 50.61. A low-income compliance officer may have minimal work experience or a degree that is not directly related to the industry in which he works.


A higher-income worker often has sizeable employment in their position or has advanced degrees in economics, accounting, law, or finance. Of course, those who work in a large institution are more likely to have access to fringe benefits that add to the overall compensation package, with chief compliance officers being on par with other C-suite executives.