Many people think that compliance officers and legal counsel have the same goal. The truth is that they have different functions and must be kept separate from each other. This does not mean that compliance officers and legal counsel should not cooperate. It merely means that they serve different roles that must work in harmony with one another if a company is to be legally and ethically in the right.
Compliance officers are responsible for setting and enforcing company policies and procedures. For example, if an employee witnesses or suspects that the company they work for or a coworker is committing fraud, a compliance officer would outline how it would reported and launch an investigation. They are also responsible for setting ethical guidelines at the company that informs employee behavior on the job.
A compliance officer is a decision-maker. They decide what happens when an employee breaks company regulations. For example, they may outline what behavior or action will result in termination, suspension, and fines. A compliance officer may also be tasked with correcting unethical behavior that is occurring at the company. They may have to set out new policies or procedures as a result of employee theft, fraud, negative publicity, and consumer demands.
Legal counsel is primarily concerned with the law. They do not decide which policies or actions to take and implement. This is left to executives and compliance officers. The legal counsel is true to its name in that it advises decision-makers on what action can and should be done as it relates to the law.
In almost all cases, legal counsel will be made up of one or more attorneys. These attorneys will typically specialize in the field of law or business that the company is involved in. A bank will want someone who has in-depth knowledge of banking regulations and financial law in their legal counsel.
The purpose of the legal counsel is to be an advisor. Their advice should be taken to make sure that the company’s action follows the law. Compliance officers don’t deal directly with the law. Instead, they implement company policies that reduce the risk of breaking a law and make sure they are followed.
It is important that the legal counsel and compliance officer work together. Following legal guidelines may still lead to unethical behavior that can be catastrophic for a company. At the same time, compliance officers must make sure they follow the laws to avoid being sued for breaking the law. Giving equal weight to legal counsel and compliance officers is the best way to ensure that you are following the law and have ethical guidelines in place.