Related Experience. A CCO should be sufficiently senior and experienced to have dealt with boards and senior management on a variety of complex issues. Former general counsel or chief financial officers are good candidates.
Independence. Ideally, the CCO should report directly to the audit or governance committee, and should have an independent budget flowing from that committee. Without a reporting relationship to the board, the CCO position is more likely to be seen as “business as usual,” with marginal value to
external and internal stakeholders. Similarly, budget dependency on management creates control (and role diminishment) problems.
Title. A corporate officer title signifies that the company takes the role seriously.
Board and Senior Management Support. Consistent and visible backing for both the position and the specific goals and themes it represents (as shown by the company’s code of ethics and business
conduct policies) is critical. “Tone at the top” is constantly measured by employees. Similarly, whether or not management’s actions follow policy and principle in the presence of inconvenient facts sends strong signals to the work force.
Sales Management Support. The support of the revenue-generating side of the business is also important. This group will quickly decide whether a given role or activity will help or hinder sales, and will respond accordingly. The CCO should therefore position the role as one of practical “sales facilitation,” and then deliver value through identifying and eliminating unnecessary steps in sales processes (while still advancing compliance goals) and, in the right situations, participating in sales calls with customers.
The creation of this position is a corporate opportunity to go beyond the letter of Sarbanes-Oxley and related requirements toward applied corporate governance. A hands-on, business-oriented CCO can translate the often amorphous elements of transparency, accountability, and integrity into positive actions — and produce tangible benefits.
Worth D. MacMurray (email@example.com) is CEO of Compliance Initiatives LLC and recently served as Peregrine Systems Inc.’s first compliance officer. He has been general counsel of four public companies, and has also held corporate operational roles.