When Your Company Should Have a Chief Compliance Officer: "Corporate Board Member November/December 2003
When Your Company Should Have a Chief Compliance Officer
by Randy Myers
The job's a luxury some companies can't afford or don't need. But the more opportunity you have to run afoul of the law, the more compelling the argument for filling the position becomes.
As a heavily regulated global insurance and reinsurance company, Bermuda-based ACE Ltd. has employees around the world who are expected to make sure it complies with insurance regulations that vary from country to country and, within the U.S., from state to state. ACE uses internal and external auditors to vet the accuracy of its financial statements; in-house attorneys at headquarters and various subsidiaries provide ongoing legal advice; and in keeping with governance reforms in the U.S., the CEO and CFO now personally certify the financial statements accuracy.
ACE clearly doesn't think this goes far enough. In March the company yanked Robert Blee out of his job as chief accounting officer, in which he was responsible for corporate accounting policy and all corporate financial reporting, and gave him the newly created title of chief compliance officer. This top-cop job means he has to ensure that ACE meets all the new governance standards with particular emphasis on the mandates handed down by the Securities and Exchange Commission under the Sarbanes-Oxley Act of 2002.
No law or regulation requires a publicly traded company to employ a chief compliance officer, and many do not. But the idea is slowly gaining currency among companies eager to distance themselves from the accounting scandals that have rocked investor confidence in the capital markets. The procession of those that have added the title in the past 12 months includes Bristol-Myers Squibb, Cinergy Corp., CMS Energy, Cooper Industries, Eli Lilly & Co., and Mellon Financial Corp. "