An article in Compliance, Winter 2012 at 14, explains some of the amendments to the 2010 Organizational Guidelines by the U.S. Sentencing Commission. According to the authors, “compliance programs should include a reporting line between the corporate compliance officer and the board of directors or subcommittee, as well as reports from the compliance officer to the board or a board committee at least annually.” Publicly traded companies must publish their codes of conduct and the authors found that about 10 percent of the Fortune 500 companies say something about the reporting line of compliance.
The article left me with the impression that the authors favor compliance reporting to the general counsel. “To avoid the dreaded silo mentality and build from the legal department’s expertise and resources, some companies have adopted a structure in which the compliance officer reports to the general counsel and is part of the legal department.” They close by saying that regardless of reporting lines, the chief compliance officer should communicate directly with the board at least annually.