Compliance officers are creative professionals. This is one of the many areas of expertise. But when it comes to corporate policy, many CCOs know how to present and promote their mission.
CCOs faced real constraints and challenges during the pandemic. CCOs were challenged as to why compliance was an important function to preserve in a time of a pandemic that threatened the very existence of many businesses. Compliance departments have been slow to develop over the past five years. The resource push towards compliance has remained stable or has been reduced slightly. Only a small percentage of compliance departments received additional resources.
As we all know, ESG is the hot topic of business management. At corporate meetings, just mention the term and attendees will be delighted with interest. Mention ESG in the boardroom and everyone sits up and looks with questioning eyes. It’s almost comical.
CCOs, however, have adopted ESG as an important tool to leverage their own needs. Quite frankly, CCOs will concede that they have dusted off previous requests for resources or personnel and framed them in new terms, using ESG language and pinning those earlier initiatives to the ‘G’ of ESG or corporate governance.
ESG has brought an important perspective to corporate governance. An essential part of this function is ethics and compliance. CCOs were ready for this and are now pushing their own agenda forward, recognizing that improvements in ethics and compliance, by definition, improve a company’s corporate governance function.
CCOs have an important opportunity in this new ESG world. Human resources professionals should partner with chief compliance officers to promote certain initiatives related to corporate governance, including culture investigations, conflict of interest platforms, corporate training and other initiatives. related. HR should also be a major beneficiary of ESG, beyond diversity initiatives.
For companies with a number of significant ESG risks and initiatives, CCOs offer quick wins in the ESG agenda by implementing short-term ethics and compliance solutions. Companies facing significant environmental and sustainability issues need to devote themselves to multi-year planning. However, ethics and compliance don’t take such a long time. CCOs know what to do and just need senior management to move forward.
ESG is a movement that is here to stay as it reflects the confluence of several important social trends. Stakeholders and consumers demand better performance from the private sector. This may reflect growing frustration with our political system and the government’s ability to solve problems. Investors, shareholders and communities want companies to fight climate change, reduce their carbon impact, focus on social justice, reduce discrimination and promote diversity. These are big issues that require special attention. Ethics and compliance are not at the forefront of these important issues but are a major player in the field of corporate governance.
Investors, shareholders and the public demand improvements in company performance – not just bottom lines, but also corporate citizenship. ESG is the start of this movement. Corporate citizenship extends beyond these initial requirements. As more attention is paid to these issues, the demand for even more performance improvements will inevitably increase.