What is the role of the Head of Compliance?
In short, the role of a Head of Compliance is to keep you out of trouble. They need to make sure that the organisation stays within all relevant laws and regulations to avoid fines and penalties.
Their main role is to build a compliance programme that is robust and effective in identifying, preventing, and remediating any compliance deficiencies.
Who does the Head of Compliance report to?
In smaller organisations the Head of Compliance will report into the CEO. In larger organisations the compliance function is usually split by geographic region with all leaders reporting into a Global Chief Compliance Officer.
The Head of Compliance will collaborate closely with the chief financial officer (CFO), the chief risk officer (CRO), and the Head of Legal.
What are the responsibilities of a Head of Compliance?
A Head of Compliance must have a thorough understanding of the organisation’s industry, staying up-to-date with current regulations and best practices. Their key responsibilities include:
- Maintaining current knowledge of regulations and laws, keeping up to date on any changes and advising the board on any changes made;
- Providing guidance to the board of directors, senior management and employees on compliance;
- Overseeing and monitoring the implementation of the compliance program;
- Developing policies and programs that encourage managers and employees to report suspected fraud and other improprieties without fear of retaliation;
- Reporting on a regular basis on the progress of implementation, and assisting these components in establishing methods to improve efficiency and quality of services, and to reduce the vulnerability to fraud, abuse, and waste.
When Should you hire a Head of Compliance?
Hiring a Head of Compliance is typically recommended when an organization reaches a certain size or complexity, or when there is a need for a dedicated focus on compliance matters. Here are some situations where making the hire may be advisable:
Regulatory Complexity: If your business operates in an industry that is highly regulated, or if you are subject to multiple and complex regulations, having a CCO can help ensure that your organization remains in compliance with all applicable laws.
Organizational Growth: As a company grows, the complexity of its operations and the regulatory environment it operates in also tend to increase. A CCO can help manage the growing compliance demands and establish effective compliance programs.
Global Operations: If your business expands its operations globally, it may face different regulatory requirements in various regions. A CCO with international experience can help navigate and manage compliance in different jurisdictions.
Risk Mitigation: If your business is exposed to significant legal or regulatory risks, a CCO can play a crucial role in identifying, assessing, and mitigating those risks. This proactive approach can help prevent legal issues before they arise.
Industry Reputation: Maintaining a positive reputation is crucial for businesses. A CCO can help establish and reinforce a culture of compliance, ethics, and integrity within the organization, contributing to a positive reputation in the industry.
Corporate Governance: Having a CCO can strengthen the organization’s corporate governance structure. The CCO can work closely with the board of directors and senior management to ensure that compliance considerations are integrated into the overall governance framework.
Increased Scrutiny: If your industry or company is facing increased regulatory scrutiny, it may be a sign that investing in a dedicated compliance function, led by a CCO, is necessary to navigate and respond to regulatory inquiries effectively.
Complex Business Transactions: During mergers, acquisitions, or other complex business transactions, compliance issues can become more intricate. A CCO can help navigate these transactions while ensuring compliance with relevant laws and regulations.
As a general guideline, as your organization grows, becomes more complex, or operates in a regulated environment, the appointment of a CCO becomes increasingly beneficial.
What competencies should you look for?
A strong educational foundation in fields such as law, business, finance, or accounting is advantageous for aspiring Heads of Compliance.
Additionally, gaining experience in compliance roles, legal departments, or risk management is highly valuable in understanding the intricacies of compliance operations.
Continuous professional development is crucial for staying abreast of evolving regulations and industry best practices. Heads of Compliance can enhance their knowledge and credibility by pursuing certifications such as the Certified Compliance and Ethics Professional (CCEP), Certified Regulatory and Compliance Professional (CRCP), or Certified Fraud Examiner (CFE).
What are some good interview questions for a Head of Compliance?
- Describe the last compliance program you successfully directed. Include key initiatives, challenges, what made it successful and whom it impacted
- Tell me about a specific plan you developed or implemented. Explain how you convinced staff at all levels to adopt it and how you ensured its effectiveness.
- Describe a method you have used to ensure monitoring and testing procedures meet the goals of a regulatory program.
- Share an experience in which you accurately predicted the regulatory impact of an industry change. What methods helped you stay informed of these changes?
- Tell me about a situation in which the pressure to compromise your Integrity was the strongest you have ever felt.
- Describe a time when you had a complex problem to solve. What options did you generate? How did you choose the best one?
- What obstacles have you faced in your current or most recent job, and how did you overcome them?
- Give me an example of a time when the details of a task or project were particularly important. How do you ensure accuracy on a consistent basis?
- Describe an effective method you have used to assess and manage possible risks.
- Tell me about a time when you reacted quickly to changing conditions.
What Salary and Benefits Should I offer a Head of Compliance?
The salary and compensation on offer should vary depending on your stage of growth. However, it is important that you get this right, as it will not only determine the available talent pool but also ensure that your Head of Compliance is set up for success and properly motivated. Below is a breakdown of the the normal compensation, depending on the type and size of financial services company, taken from our database, which includes over 1k compliance executives across the UK and EMEA.
Type of Company (All Global Roles) | Basic Salary |
FinTech | £75-120 |
Investment Banking | £175-250 |
Wealth Management (Small-Mid) | £125 – 160K |
Wealth Management (Large) | 140 – 165K |
Private Equity/ Hedge Fund – Small/Mid | 125 – 200K |
Private Equity – Large | 140 – 220K |
Investment Management | 165 – 210K |
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