When it comes to new employee onboarding, your Chief Compliance Officer (CCO) is often leading the charge with training and support – but what happens when that new employee is the CCO?
Whether your advisory firm is just getting started, you’re restructuring or you’re replacing a previous CCO, it’s important to move quickly and efficiently in finding the right individual for the role. And once the interviews are over and your new team member arrives, it’s equally critical to empower them with the right tools, information and resources to run your compliance program with success.
Related: Top five dos and don’ts for selecting your next chief compliance officer
Today, we’re exploring nine key steps you can take to onboard your firm’s new CCO, from defining goals to providing training and beyond.
Chief Compliance Officer Onboarding: Nine Steps for a Successful Transition
1. Set expectations
This first step would ideally begin before your CCO’s first day – but it’s also a good idea to revisit the conversation as they get started.
Keep in mind that there are over 50,000 CCO’s employed in the United States – and no two roles are exactly the same. One of the best ways you can set up your new team member for success is to have transparent discussions about your expectations (and theirs!).
For example, let your CCO know if they will be expected to handle all compliance tasks themselves, or if there will be additional team members or future hires to lend support. If your CCO is pulling double-duty with another job title at your advisory firm, be sure to communicate expectations as far as prioritizing responsibilities, balancing time for each role and so on.
Lastly, let your new CCO know how and when they can expect feedback, including any specific key performance indicators (KPIs) they should keep in mind.
2. Define the firm’s compliance goals, risks and culture
Next, your CCO will need an in-depth look at your existing compliance culture, processes and risks, as well as your team’s goals for the near future. Giving your CCO information on previous risks or compliance issues will give them the right mindset to guide your firm toward better solutions.
Similarly, they’ll need details on where your staff stands as far as training and general compliance knowledge. If you have individuals on staff who worked closely with a previous CCO, it may be a good idea to make those introductions early.
3. Give the new CCO access to all compliance documents and systems
Provide your new CCO with access to all relevant compliance documents, including, but not limited to:
- Form ADV
- Policies & procedures manuals, such as:
- Supervisory
- Compliance
- Proxy voting
- Physical security and cybersecurity
- Material non-public information
- Business continuity and succession plans
- Code of Ethics documents
- Investment advisory contracts
- Disclosures
- Insurance documents
If you’re unsure whether a document is relevant, it’s best to include it for their review.
4. Introduce key personnel
Understanding the internal structure of your firm is crucial for the CCO to perform their role effectively. Introduce them to key personnel, including members of the compliance team, executives and department heads.
Additionally, clarify how compliance information will be communicated both internally and externally. Establishing effective communication channels ensures that compliance-related updates and concerns are addressed promptly and accurately.
Note: A significant change in your staffing also often calls for a client announcement, whether that be a standalone email or a dedicated space in your regular newsletter.
5. Provide technology and processes training
Advisory firms continue to embrace technology solutions, with 79% agreeing that digital infrastructure is key to retaining firm talent, and 89% reporting that a high-quality digital client experience is crucial to differentiation.
Whatever tech tools your firm is using, your CCO will need a thorough understanding of how they function, who uses them and why – especially since any software your team uses creates additional cybersecurity risk.
Set aside time early on in the onboarding process to fully train your new CCO on each piece of technology and/or vendor, from your CMS to your email platform and more. Then, be sure to schedule ongoing training sessions until the CCO feels proficient with all software.
Related: How to find the best-fit compliance management technology for your firm
6. Support your new hire with the right outsourced resources
Your new CCO will likely have a plethora of information and work to take on as they begin their tenure with your firm. How can you best support them? By outsourcing some of the more manual or time-consuming tasks.
By leveraging outsourced managed services, you can take tasks like email review, licensing and registration, platform Code of Ethics administration and advertising review off their plate. Leaving your new hire to focus on the bigger picture items which will have strategic impact on your firm and its future success.
7. Establish a timeline
Rome wasn’t built in a day – and similarly, your new CCO will take time to get up and running. Consider establishing a realistic timeline with specific phases for each onboarding step. For example, their first week may be best spent reviewing materials and making introductions, while week two is set aside specifically for technology training, etc.
Of course, ensure that your timeline allows time for your CCO to ask questions, adequately absorb information and fully settle in.
8. Conduct a risk assessment
Anytime your firm undergoes a big change, like a new CCO, it’s a good idea to revisit your risk areas through a comprehensive assessment.
Your risk assessment should three key components:
1. Identify areas of operational or compliance risk. Start by creating a list of operational and compliance risks within your specific firm.
2. Hold an all-hands meeting or other strategy to involve your entire team. Give your employees a heads-up so they have time to ruminate on the topic beforehand.
3. Review recent SEC risk alerts. These announcements give firms a look at which specific risks may be most relevant.
9. Empower the new CCO
Finally, it’s imperative that you empower your new CCO with the authority they need to implement and reinforce compliance.
Related: Key takeaways from the 2023 CCO Playbook
Peter Driscoll, former Director of the Office of Compliance Inspections and Examinations, gave a speech on CCO challenges in 2020, reminding firms that:
“…an adviser’s CCO should be competent and knowledgeable regarding the Advisers Act and should be empowered with full responsibility and authority to develop, implement, and enforce appropriate policies and procedures for the firm. And a CCO should have a position of sufficient seniority and authority within the organization to compel others to adhere to the compliance policies and procedures.”
Onboarding a new CCO, when approached correctly, is a time of opportunity and growth for your organization. With these eight steps in hand, you’re better prepared to successfully transition compliance to new leadership within your firm.
It’s Time to Feel Confident in Your Compliance
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