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Compliance is hot — why hiring is on the upswing

If 2013 and the last two weeks have shown us anything, the rollout of regulation and pace of enforcement actions related to corporate wrongdoing are not showing signs of slowing. In corresponding fashion, is the hiring of professionals dedicated to creating and monitoring corporate compliance policies and procedures on the upswing?

Turns out, yes.

The use of non- and deferred prosecution agreements are also placing more emphasis on the compliance function. These agreements often require that outside compliance monitors advise the companies about how they can strengthen their compliance programs by focusing on the allegations undergirding the agreements.

Consider also the creation of new businesses under the JOBS Act, and the need for compliance savvy rises even higher.

“The combination of all of the factors you just mentioned force the hand of employers to hire more compliance professionals,” says Jack Kelly, managing director and co-founder of the the Compliance Search Group in New York.

“The aggressiveness of the regulators right now is something hiring managers will mention. They can no longer make do with the bare minimum in their compliance department. Companies now have reviewers reviewing the reviewers to try to stop anything from falling through their system of controls,” he adds.

So they are actually scared of the fines and adverse publicity that enforcement actions can bring to their profits and good name?

“The Wall Street culture is such that no one admits to being nervous about such things, but there is certainly a demand for proven expertise now. They don’t have the time to ‘wing it’ with barebones departments or folks with no experience.”

I asked him if that means companies are now asking for specific skills and backgrounds, tailored to their businesses.

“Yes,” he said. “The big banks wants to grab the qualified people from other big banks, the hedge funds want hedge-fund experience. And, whereas in years past they would take a candidate with three out of four of the traits they were seeking, they are now waiting for the one who has nine of 10 specific characteristics.”

Who is making the decisions to expand compliance departments or reconstitute a compliance program in a firm?

“A big driver are the board of directors of firms these days,” says David Symes, managing director of Compliance Recruitment Solutions in London. “The are now authorizing whatever level of budget it takes to keep both the firm’s reputation and their own personal reputations from serious damage.”

Symes said board members are demanding better and more compliance expertise, and compliance professionals are demanding to be heard. “These compliance and risk managers will tell boards, ‘listen, you can give me all of this power to do “X” but provide me zero resources, and I will promise you, “X” will not happen.'”

Suzanne Richards, President of FPC Fort Washington, a nationwide executive placement and consulting firm located in Pennsylvania, has not seen board members getting overly involved in compliance. “But outside counsel are more likely to advise firms to hire more compliance professionals these days.”

As global enforcement becomes a reality, companies face risks based on their extraterritorial conduct and can answer to regulators in multiple jurisdictions. Negotiating deals, hiring vendors and looking for new business open up possibilities for greater profits … and greater risks.

Evidently, many businesses are realizing that maintaining a profitable business goes hand-in-hand with investing in compliance professionals and programs.

Will they empower and help these professionals promote company-wide respect for and adherence to those compliance measures?


Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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