Compliance and law residing within the same function?

An article in the Metropolitan Corporate Counsel (James Ewing and Gerald Kral, July 2005 at 40) stated: “Organizationally, the formal compliance function most commonly resides within the CLO organization.” (See my post of May 20, 2005 questioning the linkage of law and compliance.) Agreed, but consider the authors’ rationale.
The authors defend the logic of this reporting model on the grounds that “the CLO usually has responsibility in the event of an infraction, so having compliance in the CLO’s organization creates accountability for preventing it in the first place.” Well, maybe.
Many “infractions” that compliance detects do not require legal involvement; only changes to practices and procedures need be made. More important, it is harmful to a law department to fill the sheriff’s shoes, arresting bad guys. Lawyers should focus on more strategic activities than “preventing [compliance failures] in the first place.” (See my post of May 20, 2005 about merging law and compliance.)

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