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One out of five top compliance officers report to the general counsel

Compliance Week conducted a survey that InsideCounsel, June 2008 at 14, draws on for some metrics. Of the companies that responded, a third (31.7%) had a position called “Chief Compliance Officer.”

As to where the “top compliance executive” reports, about a third (34.9%) report to the CEO and one out of five (20.8%) report to the general counsel. A tiny minority (2.5%) reports to the Board of Directors (See my posts of May 3, 2006: law department as the “independent beacon of ethics and compliance”; and Sept. 27, 2005 #4: Merrill Lynch had 280 lawyers and 235 “compliance executives” worldwide.).

Many posts on this blog describe reporting lines of compliance functions (See my posts of Nov. 1, 2005: one-third to general counsel; May 20, 2005 and July 31, 2005: compliance and law within same group; Oct. 21, 2005: where should compliance report if not to law; Jan. 16, 2006: in health care companies; Dec. 22, 2005: law department relationship to ethics and compliance heads; Feb. 7, 2006: in financial institutions; Sept. 17, 2005 #2: at Citigroup, compliance reports to chief risk officer; Nov. 16, 2005 #1: at Raytheon, Chief Ethics Officer and the Chief Compliance Officer report to GC; Jan. 17, 2006 #1: to GC at McDonalds.). When compliance professionals and lawyers report and work in the same group, there are potential negative interactions between the two groups (See my posts of Feb. 12, 2006 and March 26, 2005: avoiding a two-tier system of employees.).

The day-to-day activities of compliance lawyers and professionals have seldom appeared here (See my posts of Sept. 5, 2005: tracking new laws and their effects at Countrywide; Dec. 31, 2006: ethics hotlines and compliance officers at Raytheon; and June 19, 2006: systems that allow employees to report legal and ethical infractions.).

One common activity, where there is a compliance program, is employee training (See my posts of Dec. 19, 2005: British Petroleum’s law department and its online compliance and ethics training; July 5, 2006: online legal and compliance training vendors; June 13, 2006: online compliance training; Oct. 25, 2006: at Genentech; and March 25, 2005: case studies that spread awareness of legal and compliance risks.).

It is expensive to fund compliance functions (See my posts of May 30, 2005 and June 15, 2005: law firm and inside legal costs of SOX compliance; July 25, 2005: financial services companies spent $11 billion in 2005 on money-laundering compliance; and Dec. 20, 2005 and Dec. 22, 2005: spending on compliance and ethics programs compared to legal programs.).

Surveys aplenty provide us with metrics regarding compliance functions (See my posts of July 25, 2005: best practices for legal risk and compliance; Oct. 25, 2006: Corpedia benchmarking survey; Sept. 4, 2005 #4: “corporate compliance/reputational risk” ranked second highest for importance in European study; and Aug. 26, 2006: survey of “business challenges” to law departments.). Another source of information is associations (See my posts of Jan. 17, 2006: Ethics Officer Association and eight global standards; and Oct. 25, 2006: rebranded Ethics and Compliance Officer Association.).

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