Definition
A compliance officer is an employee charged with making sure a company follows external laws and regulations and its own internal rules. The chief compliance officer (CCO) is the senior executive who leads the compliance function and sets the department’s strategy and controls. Compliance work is focused on identifying regulatory risk, preventing violations, and maintaining documented processes to manage and measure those risks.
What compliance officers do (concise)
– Design, document and update internal policies and procedures to reduce legal and regulatory risk.
– Review communications and business practices (for example, required disclaimers, accessibility, safety) to ensure they meet legal and policy standards.
– Run or coordinate internal audits and ongoing monitoring to find gaps.
– Deliver training sessions to employees when rules or risks change.
– Create contingency plans that set out how the firm responds to a suspected or confirmed compliance breach.
– Recommend or apply disciplinary measures and corrective actions when breaches occur.
– Maintain independence and objectivity; resist inappropriate influence from colleagues or management.
Key skills and qualifications
– Knowledge of the business and the regulatory environment for the industry.
– Strong ethics, integrity, and impartiality.
– Attention to detail and the ability to review others’ work critically.
– Communication and interpersonal skills for training and influencing across teams.
– Typical minimum education: bachelor’s degree; many senior roles prefer advanced degrees (law, MBA) or relevant professional experience.
– Optional certifications: Certified Compliance and Ethics Professional (CCEP) and other industry-specific credentials.
Step-by-step checklist for employers hiring or evaluating a compliance officer
1. Verify education and relevant industry experience.
2. Check for professional certifications (e.g., CCEP) or evidence of ongoing compliance training.
3. Assess independence: reporting lines should protect objectivity (ideally reporting to board/independent committee for serious matters).
4. Review demonstrated skills: policy design, auditing/monitoring, training delivery.
5. Confirm documented processes: monitoring schedule, incident response plan, recordkeeping standards.
6. Ensure escalation and disciplinary procedures exist and are enforced.
7. Confirm regular training and communication channels to the workforce.
8. Evaluate resourcing: team size, budget, and access to external legal or investigative experts.
What to do if a breach is suspected (practical sequence)
1. Detect and flag the issue through monitoring or reports.
2. Contain immediate risk (stop the activity if possible).
3. Investigate to determine scope and root cause.
4. Remediate: correct systems or processes and apply disciplinary measures as appropriate.
5. Update policies, controls and training to prevent recurrence.
6. Monitor to verify the fix works.
Worked numeric example (salary context)
Using U.S. Bureau of Labor Statistics (BLS) May 2020 figures (reported range for compliance occupations):
– Annual range: $40,160
– Annual range: $40,160 to $132,190 (BLS May 2020 reported range for compliance-related occupations).
– Median annual salary: about $71,100 (50th percentile).
Worked conversions (assume 2,080 work hours per year = 52 weeks × 40 hours):
– Lower bound: $40,160 ÷ 2,080 = $19.31 per hour.
– Median: $71,100 ÷ 2,080 = $34.18 per hour.
– Upper bound: $132,190 ÷ 2,080 = $63.55 per hour.
Notes and assumptions:
– These figures aggregate several compliance-related roles (titles and scope vary by industry). Employers may report different titles (e.g., compliance analyst, compliance manager, chief compliance officer).
– Actual pay depends on location, industry, company size, specific duties, certifications, and experience. For up-to-date figures consult the BLS or local job-market data.
Key factors that influence compliance pay and career progression
1. Industry: Financial services, pharmaceuticals, healthcare and energy often pay more than nonregulated sectors.
2. Role seniority: Analysts → managers → directors → chief compliance officer (CCO). Each step typically multiplies responsibility and compensation.
3. Geographic location: Major financial centers and high-cost-of-living metro areas pay premiums.
4. Certifications and education: Relevant certifications and advanced degrees increase marketability and pay (see certification list below).
5. Scope of responsibility: Global programs, regulatory reporting, and direct board interaction command higher pay than narrow, task-based roles.
Common compliance certifications (definitions)
– CAMS (Certified Anti‑Money Laundering Specialist): focus on AML controls and investigations.
– CCEP (Certified Compliance & Ethics Professional): general corporate compliance and ethics program skills.
– CRCM (Certified Regulatory Compliance Manager): banking/regulatory compliance specialization.
– CFE (Certified Fraud Examiner): fraud detection and prevention focus.
– Advanced degrees: JD (law), MBA, or master’s in compliance/regulatory affairs (where relevant).
Sample career path (typical timeline)
– Entry-level (0–2 years): Compliance analyst/associate — monitoring, basic transaction review, report drafting.
– Mid-level (2–6 years): Specialist or manager — policy writing, investigations lead, program maintenance.
– Senior (6–12 years): Director/Head of compliance — strategy, program design, liaison with regulators.
– Executive (10+ years): Chief Compliance Officer — board reporting, enterprise-wide risk oversight, budget authority.
Hiring checklist for employers (practical)
– Define the scope of authority: decision rights, escalation paths, reporting line (direct to board/CEO preferred for independence).
– Minimum qualifications: relevant education, years of experience, certifications required/desired.
– Technical skills: regulatory knowledge, investigation techniques, data analytics, policy writing.
– Soft skills: independence, judgement, communication, ability to influence senior management.
– Resources: budget for team, training, technology, and external counsel/forensics.
– KPIs: case closure time, remediation completion rate, training completion, audit findings resolved.
Interview question checklist for candidates
– Describe a compliance breach you investigated. What steps did you take and what was the outcome?
– How do you stay current with relevant regulations in this industry?
– Give an example of a time you had to escalate an issue to senior management or the board. How did you present it?
– What remediation approach would you take for a repeated control failure?
– Which compliance metrics do you think matter most for this role
– Interview red flags to watch for
– Evasive answers about past breaches, lack of specifics on remediation steps.
– Overreliance on policy language without examples of practical implementation.
– No awareness of relevant regulators or recent rule changes for your jurisdiction.
– Defensive attitude when asked about escalation or conflicts with business lines.
– Weak data/technology literacy for roles that require monitoring or analytics.
– Candidate evaluation rubric (use for panel scoring)
– Steps:
1. Define evaluation categories and weights (example below totals 100).
– Technical/regulatory knowledge: 30
– Investigation & remediation experience: 25
– Risk assessment & monitoring skills: 15
– Communication & escalation: 15
– Leadership & culture fit: 10
– Tech/data literacy: 5
2. Score each candidate 1–5 in each category (1 = poor, 5 = excellent).
3. Compute weighted score = sum(weight × score)/sum(weights).
– Worked example:
– Candidate A scores: 4, 3, 4, 5, 3, 4.
– Weighted total = (30×4 + 25×3 + 15×4 + 15×5 + 10×3 + 5×4) / 100
= (120 + 75 + 60 + 75 + 30 + 20) / 100 = 380 / 100 = 3.8/5.
– Use thresholds (e.g., ≥4.2 strong, 3.5–4.1 acceptable, <3.5 needs review).
– Onboarding checklist for a new compliance officer (first 30 days)
– Day 1–7: access & introductions
– System access: policies, case management, monitoring dashboards, HR, legal.
– Meet key stakeholders: General Counsel, Head of Risk, Internal Audit, business line heads, IT/security, HR.
– Day 8–30: understand current state
– Read core program documents: compliance manual, risk assessment, previous exam/audit reports, recent remediation plans.
– Review open cases and investigations; attend handover meetings.
– Establish 30-day deliverables: prioritized list of 3-5 high-risk issues and proposed next steps.
– Metrics to set immediately:
– Baseline number of open investigations.
– Average case age (days).
– Training completion rate by employee group.
– 60–90 day priorities (practical goals)
– 60 days:
– Implement or refine KPI dashboard showing: case volume, average case age, remediation completion rate, training completion.
– Present initial risk heat map to senior management with recommended quick wins.
– 90 days:
– Deliver a remediation plan for top 2–3 risks with owners and timelines.
– Propose a 12-month compliance calendar (attestations, audits, training cycles).
– Example KPI targets (illustrative):
– Reduce median case age by 25% in 90 days.
– Achieve 90% completion for mandatory training for high-risk groups.
– Technical & reporting setup checklist
– Ensure case management system tags by risk type, business unit, and severity.
– Configure automated alerts and SLAs for case milestones.
– Establish monthly board-ready reporting template: trend lines, top incidents, remediation status, regulatory interactions.
– Common challenges and mitigations (rapid-action steps)
– Insufficient resources:
– Mitigation: prioritize controls using a risk-based scoring model; build a phased hiring/training plan; outsource surge work (forensic review) with clear SLAs.
– Poor data quality/access:
– Mitigation: map data owners, request API or extracts, create minimally viable dashboards while working on longer-term data governance.
– Cultural resistance from business lines:
– Mitigation: use targeted training, joint-working groups, and emphasize risk-adjusted business outcomes; escalate persistent noncompliance per policy.
– Regulatory ambiguity:
– Mitigation: document interpretations, obtain legal counsel where needed, and consult regulators or trade groups when feasible.
– Career development and common certifications
– Certified Anti-Money Laundering Specialist (CAMS) — ACAMS
– Focus: AML/CFT detection, investigations, transaction monitoring.
– Typical prep: 30–120 hours depending on experience.
– URL: https://www.acams.org
– Certified Regulatory Compliance Manager (CRCM) — American Bankers Association (for banking)
– Focus: regulatory compliance in banking products and operations.
– URL: https://www.