Today, Chief Legal Officers are entrusted with making sense of increasingly complex compliance requirements in this age of unprecedented uncertainty. CLOs now command larger staffs and budgets than ever before, and have growing influence on crucial strategic decisions. In this new environment, how can forward-thinking CLOs protect their organizations and stay ahead of ongoing change?
The Mandate for Guidelines on Compliance
Uncertainty seems to be a watchword today. Even as the Trump Administration has generally projected an anti-regulatory stance, a number of recent infractions have spurred media attention, political pressure, and activist involvement — all of which suggest more oversight with tighter compliance requirements in the future.
To play an active role in shaping that future, corporate legal departments — not to mention compliance professionals from elsewhere on the organizational chart — need guidelines for handling the new compliance environment. CLOs can serve as champions in the adoption of evolving guidelines, and here are a few places to start.
Understand your organization's risk appetite. In-house lawyers must understand their organization's appetite for risk. Establishing clear reporting relationships helps minimize opportunities for misunderstanding. Achieving a corporate culture of transparency and compliance starts at the top, so CLOs increasingly have a direct reporting line to the CEO.
Communicate. In data-saturated work environments, champions of compliance add value by distilling only the most relevant information from the volumes of data. That's just the beginning. From there, CLOs can drive compliance-related behavioral change by communicating this information using strategic contexts and channels that resonate with key audiences.
Demonstrate competitive advantage. The 2007–2008 financial crisis taught CLOs to squeeze productivity from reduced budgets and staff. Today, the resources available to corporate law departments are more abundant, but CLOs still face pressures to derive maximum results from their budgets — which means it’s important to justify investments in compliance and ethics in terms of risk management, reputation management, or the promise of other competitive advantages.
Reconsidering the Opportunities Ahead
The ascent of corporate legal departments is increasingly being recognized by compliance professionals at all levels as a mandate for coordinated action. The times call for CLOs to go beyond asking “What is legal?" to asking “What is right?" to be able to fully protect the organizations they represent from reputational damage – or worse.
The ascent of Chief Legal Officers has brought change to the world of compliance, but also new opportunities — for those ready, willing and able to adapt.
About the AuthorMore Content by Nyembo Mwarabu