A Compliance officer in a financial institution is a much more important person nowadays than he was in the 90’s. This position is corroborated by several international standards, regulations and laws. Today, he is senior enough to regularly make compliance representations and commitments on behalf of the company and also enters into regulatory commitment on its behalf which impact on the day-to-day running of the company’s business. It should be noted that several management, administrative and operational matters now come within the ostensible authority of a “compliance officer”.
Although, management of compliance risk comes under the purview of the Board of the company; however the practical day to day management of compliance risks and programs cannot be tabled or deliberated by a board that sits quarterly or semiannually in a financial year. Hence, the onerous role is delegated to the compliance officer who in turn with the compliance team ensures that the company indeed operates within the prevailing laws impacting on the operations of the company. This role is significant because it is birth by legislation and though this officer is an employee of the company, s/he is also accountable to the regulators. Though, he a owes a duty to the management, board of directors, shareholders of the company, however, he works to ensure that all existing, amended or new regulatory or legislative directives are effectively and timeously implemented by the company, thereby justifying the rationale that the role of the compliance officer has evolved from being ‘a mere officer’ of the company to an officer of the company exercising extensive powers and duties, it is this transmutation and recent regulatory scandals and global economic upheavals in the financial sector that has heightened the barometer of the skill required by a compliance officer.
It cannot be overemphasized that the in any jurisdiction, the role of a compliance officer in a financial institution is a dynamic and complex responsibility therefore it requires a variety of competencies and skills for success and effectiveness. A compliance officer must have and be able to demonstrate the under-listed skills and competencies in order to provide assurance to the Board that the compliance risks are effectively managed and justify the relevance and effectiveness on the role on day to day to senior management and other stakeholders.
The Compliance Officer is a senior management position with reporting lines to the Board, meaning occupants of this role “rub shoulders” with top senior managers of the organization and even the Board, therefore to survive, have any impact or operate successfully, the Compliance Officer must exert have influence predicated on trust. Trust, not fear, enables him to command the respect of his colleagues and the Board. If he successfully operates at this level, he will earn and hold the respect of his peers, such that he is seen as a business partner and he is able to make within effective timelines, key regulatory compliance decisions and ethical contribution to the organizations strategy.
Another germane skill is good communication. Good communication skills by compliance officer supports influence is good and excellent communication. In order to exert the positive influence and trust, a Compliance Officer must have excellent interpersonal skills and exceptional communication. Poor exhibition of this skill attract negative returns on compliance communications and business approvals at all levels thereby enabling frictions and needless loss of collaboration. A Compliance Officer must put across the Compliance message in an aptly and easily digestible way that is understandable and appeals to; not repels the business.
The aptitude to research and analyze complex business and regulatory issues is a critical. It is a skill that comes to play when carrying out monitoring and compliance risk assessment reviews. The Compliance office is a repository of regulations, , regulatory directives and law, therefore it is expected that activities of the firm that are non-compliant must be identified during such reviews, hence it is only logical that the Compliance Officer must have present and sound understanding of the laws, codes of practice and regulations applicable in their jurisdiction. He must show complete understanding of his regulatory universe and know when to seek assistance subject matter expert.
A good compliance officer will need very essentially good negotiating skills to help arrive at prudent commercial and honest regulatory decisions. It must be emphasized that the word ‘No’ should never begin a compliance discuss or response, rather it must be replaced with ‘there is a possibility’. S/he must not habitually threaten the business heads with the regulators sword hanging over their heads for non- compliance, he is doomed, the Compliance Officer must become a public relations officer, constantly witty and diplomatic. He can only sell Compliance over revenue after developing a reputation for pragmatism and this is possible where the business heads implicitly trusts the Compliance Officer and willingly to go with compliance advisory. This skill set is a sine qua non for success on the role.
Listening skills are vital for the compliance role. A Compliance Officer must be accommodating, that is, s/he must be temperate, one with listening ears and also the ability to discern whilst listening. By listening a professional Compliance Officer is able to recognize and anticipate segments where there will be ‘no buy in’, in the business. Listening also facilitates early identification of risk issues, or potential issues, equally important is that it demonstrates empathy and present opportunities for feedback on compliance advisory and guidance to business heads.
A Compliance Officer must adroit organizing skill short of the inability to manage the business of compliance. He must organize a compliance department capable of driving the compliance culture. That is, he must ensure appropriate staffing, meaning that the department must have enough staff. The Compliance Officer must not be the lone star others in the department must be qualified and possess relevant experience and interpersonal skills. The distribution of tasks must be in line with individual specialty, individuals’ performance and there must be clear succession plan for key personnel as well as clear responsibilities and unambiguous reporting lines. In order to improve their skills and competence, a training and development plan must be in place with necessary approvals obtained.
A Compliance Officer must be resilient. The compliance message does not immediately sink in, initially a deliberation on the cost of compliance usually relegates a firm adherence to regulatory compliance, but the pendulum swings back soon enough. A Compliance Officer must be patient during these times. He must continue to show gravitas and enthusiasm and the willingness to take on new situations.
The adoption of the full bouquet of skills maybe a daunting task for Compliance officers but compared to the cost of non-compliance, it is a commensurate price to pay. Therefore, a contemporary compliance officer must be judged impartially in this regard. It is also important and sagacious for compliance officers to constantly carry out a self- assessment of their skills in order to recognize and improve their strengths or overcome their weaknesses. This is the only way to raise the status que ante and value the effectiveness compliance contribution to business, after all, the business pays for the Compliance officer so it is only fair that they get their money’s worth.