Donna Boehme is back on the Masters of Disaster® podcast to discuss what it takes for compliance to succeed. Donna often refers to the new approach for the architecture of Compliance 2.0. Fundamentally, Compliance 2.0 starts with subject-matter experts with experience in compliance and how compliance is designed and managed. The most important hallmark of Compliance 2.0. is having a leader who is able to lead the operations toward compliant behavior.
The five elements of the Compliance 2.0 model are described by Donna in an infographic found on her website here. The first two elements we discuss in more depth on today’s podcast are:
The Chief Compliance Officer (CCO) must have a clear mandate to design and manage “effective compliance programs” as described in the Federal Sentencing Guidelines. The CCO also has the support of the Board of Directors with unfiltered Board access.
Under Compliance 1.0, compliance was not independent from businesses and decision-making was high-jacked by business incentives. Compliance must have independent power to make decisions separate from the incentives of other departments.
Recently, Donna Boehme released a very popular article on the Five Signs that Compliance 2.0 is the New Normal. We discuss the five signs and what about them points to a greater understanding and implementation of Compliance 2.0 today compared to twenty years ago. The five signs we discuss can be paraphrased as:
- Compliance is more often defined as a separate function from legalities. Over the last two decades, the compliance profession has successfully defined itself as a new and subject matter expertise that is separate from the legal department.
- Both regulators and prosecutors publicly acknowledge the importance of independence, empowerment, and compliance subject matter expertise, which are all elements of Compliance 2.0.
- The DOJ embraces the elements of Compliance 2.0 in the FCPA Pilot Program.
- Compliance professionals understand the importance of the elements of a Compliance 2.0 and how it supports their success in their role and are being very selective about the CCO jobs they take.
- Studies show that the next generation of compliance is more likely to be positioned for success.