By Blandine CORDIER-PALASSE, Analyse Financière no. 58
For Blandine Cordier, compliance is not just about complying with legal or financial standards. It includes processes designed to ensure good corporate governance. Optimally, they aim to improve overall performance. A vision of the business goes far beyond compliance.
For investors, partners, employees, customers, suppliers... a good company is one with which you want to associate. In particular, it has an efficient and solid organisation at its core. But many companies today are vulnerable. They are vulnerable to illegal activities or otherwise, at every level of the organisation, sometimes without even realising it. 78 % of business leaders worldwide consider the proliferation of regulations to be the main obstacle to the growth of their business. But only 35 % turn to the Chief Compliance Officer (CCO) to anticipate regulatory risks that could compromise their strategy. And yet, these risks can also become opportunities, a competitive differentiator.
With globalisation, increased competition and the race to achieve ever higher targets on the one hand, and increasingly complex national and international regulations and standards on the other, non-compliance has become a critical risk. A single incident can damage a company's image and reputation. The same act can jeopardise its performance and even its very survival. In the wake of the Sarbanes-Oxley Act, Anglo-Saxon groups have been committed to this approach for several years. They are therefore ahead of our companies. For them, compliance is an indicator of good governance and one of the fundamental strategic elements.
I was a lawyer and then legal director and board secretary in listed groups for 15 years. I actively contributed to the implementation of corporate governance in these groups.
Since moving into recruitment, I've had a clear idea of the impact of compliance on companies. The expertise I've acquired enables me to support the development of these new professions. It also enables me to recruit cross-functional, multi-disciplinary and complementary teams in France and abroad, for global or regional deployment.
COMPLIANCE AND CONFORMITY: TWO DIFFERENT CONCEPTS
Compliance involves understanding strategy and aligning behaviours with tools that enable compliance. It's a change of prism, of paradigm, of security. Above all, it is a culture of compliance with the rules to ensure more solid and sustainable performance. Compliance is the objective. It defines how far to go to guarantee the safety of operations. The aim is to protect the company's reputation and avoid civil and criminal liability.
The introduction of compliance programmes is a key element of the
to support this cultural change. The aim of this approach is to define and assess risks. It also aims to make all stakeholders aware of their importance. Added to this is the need to adopt responsible behaviour in order to transform these risks into opportunities. Above all, we need to ensure the company's security. It gives meaning to everyone's actions in a context where risks are no longer just financial but also extra-financial. Reputation risk, for example, is one of the company's main assets.
THE ROLE OF THE CHIEF COMPLIANCE OFFICER
The main task of the CCO is to protect the Group and its most important assets: its customers and its reputation. It supports all activities and must be present in all geographical areas. The CCO is responsible for ensuring compliance with the increasingly complex and extra-territorial regulations, professional and extra-professional standards, and rules of ethics and good conduct defined by the company and its environment. The CCO must analyse these rules and standards from the perspective of the company, its business, culture, challenges, markets, global economic and extra-financial environment and the associated functional, operational, image and reputation risks.
As the linchpin of the implementation and roll-out of compliance at all levels of the company, as close as possible to the company's business challenges, the CCO will first define the company's DNA in order to deploy an appropriate compliance programme. The CCO's excellent understanding of the company's organisation, culture and activities means that he or she is able to anticipate the risks and constraints specific to the company and communicate effectively on the benefits of implementing good practices.
The compliance officer's role is highly multi-faceted. It is both
vertical - from the Chairman downwards to all levels of the Group - and transversal - in collaboration with all the functional and operational departments. A CCO cannot put in place an efficient programme unless the "tone from the top" is given. This guarantee must not be "cosm'ethical". In this context, compliance is not limited to compliance with legal or financial standards. It includes processes designed to ensure good governance within the company and, optimally, to improve its overall performance.
PROFILE OF THE IDEAL COMPLIANCE OFFICER
As well as having a global vision of the business and market developments of their company, CCOs will be highly adaptable and sensitive to changing rules and ethics. They will be open-minded and curious, independent, rigorous and honest, with strong leadership qualities. He or she will need to be a good communicator and a good teacher, humane but firm. Their skills and human qualities will enable them to advise, train and raise awareness of compliance, business ethics and compliance among the company's employees and stakeholders, particularly in the context of social and environmental responsibility. He or she is also a sensor and a watchdog that employees will not hesitate to question when a sensitive issue arises.
CCOs do not learn their trade through academic study alone. Their experience, accumulated through the situations they encounter, will enable them to add to their knowledge, develop their skills and affirm their human qualities. Every day, they will have to listen, understand and analyse complex issues, and identify and propose practical solutions. We are therefore recruiting more and more Compliance Officers with international profiles. They come from very different and complementary backgrounds: sales,
engineers, auditors and lawyers. It is this complementarity and diversity that makes a compliance team so rich. It ensures a better understanding of all the parties involved. However, there are several pitfalls to be avoided. The first is the temptation to be politically correct. Posting an ethics charter or a code of good conduct is not enough if it is not accompanied by a compliance programme.
The CCO must also make everyone more accountable through a better understanding of the strategy. The CCO must avoid disempowerment or the misuse of compliance to make the offence compliant.
A CHANGE IN POSITIONING
European companies are becoming increasingly aware of the importance of being compliant. Closer to senior management, the CCO becomes a member of the Executive Committee. He has a direct link with the audit committee and the chairman of the board. His remuneration is aligned with that of the members of the Executive Committee.
Management has realised that CCOs have become strategic partners in the face of accelerating change and increasing risk and regulation. They help to anticipate compliance requirements before they become an obstacle to achieving the company's strategy. CCOs help to get the message across during training and awareness-raising sessions. They pass them on from management to all employees and, in return, from the field to management. The CCOs also implement and roll out more than just a programme. They lead to the conduct of business by and for the company, based on responsibility and ethics, by aligning the organisation with business challenges. The aim is to improve overall performance.
Setting up compliance programmes therefore gives meaning to everyone's actions. This programme takes place in a context where risks are no longer just financial but also extra-financial. Reputational risk is one of the company's main assets.
BLANDINE CORDIER HAS BEEN FOUNDER AND MANAGING PARTNER OF BCP EXECUTIVE SEARCH SINCE APRIL 2010. SHE IS VICE-PRESIDENT OF THE CERCLE DE LA COMPLIANCE, WHICH SHE CO-FOUNDED IN 2011.
She began her career with the Schlumberger group before joining Slaughter & May in 1988 as a lawyer. She then moved on to listed groups as General Counsel. She was secretary to the board of directors of Parfinance from 1994. She joined Gemplus in 1998 and Siparex in 2007. She holds a doctorate in law, a Master's degree from ESCP and is a member of the Paris Bar. Blandine CORDIER-PALASSE is also a company director.
