How to Structure Chief Compliance Officer Reporting Lines to Maximize the Efficacy of Anti-Corruption Compliance (Part One of Three)

The structure of a chief compliance officer’s reporting line within a company fundamentally affects the authority and efficacy of the CCO.  Operating, investment and other companies generally agree on the stakes of appropriately structuring CCO reporting lines – they agree that the right reporting design is essential to revenue and risk mitigation – but industry practice on the topic is by no means settled.  Companies routinely ask, for example: Does having the CCO report to the company’s CEO – as opposed to the board of directors – confer sufficient authority?  Can the CCO operate effectively while reporting to the general counsel?  Is a direct line from the CCO to the board a requirement for an effective compliance program?  To help companies answer these questions, the Anti-Corruption Report is publishing a three-part series examining the pros and cons of various reporting structures.  This article, the first in the series, (1) assesses the recent trend of companies shifting away from direct reporting of compliance to the legal department, (2) discusses guidance provided by the government on this topic, (3) outlines various issues a company should consider when choosing a reporting structure and (4) explains why there is no one-size-fits-all solution to this compliance quandary.  See also “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two)” (Apr. 3, 2013); Part Two of Two (Apr. 17, 2013).  On evaluating compliance programs generally, see “Best Practices for Reviewing Anti-Corruption Compliance Programs: Implementation, Remediation and Documentation (Part Three of Three)” (Sep. 11, 2013).

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