Welcome to the Research Assistant Weekly Newsletter - a subscriber-only resource for insight into emerging compliance challenges, details on peer calls, and links to new Research Assistant reports, documents, tools, and more.
This week our Research Assistant Peer Group had a lively discussion about ever-growing compliance responsibilities and when it is appropriate to delegate some of those responsibilities. This discussion led us down a path where we began digging into different committee structures, which we’ll break down today.
Why do we like committee structures so much?
A committee is given authority through an organization’s board of directors to make decisions and is made up of cross-departmental representation. A committee structure also provides some formality to your decision-making processes and ensures decision-making is not done within organizational silos.
Many companies (even small companies!!) can put together a small Compliance Committee of a few people from various departments. The idea behind forming the committee is that compliance decisions, including implementation, can be discussed in a group setting and responsibilities can be shared as appropriate. Compliance professionals whose organizations use a Compliance Committee often find they are more connected to their operational peers and decision making becomes easier.
That said, one of our members astutely brought up that despite the attempt to share the decision making process, sometimes the responsibility of the Compliance Committee falls entirely on the Chief Compliance Officer (or similar role) which may lead to it not being as effective as originally intended. This member suggested implementing a Risk Committee instead.
How is a Risk Committee different from a Compliance Committee?
Since organizational risk impacts every area of your business, Risk Committee members share responsibility in setting the agenda, preparing the presentation, and being accountable for the implementation of any decisions based on those risks (instead of it all falling on compliance). Additionally, “risk” is a common term that makes sense to both compliance and operations professionals, so creating a committee to assess “risk”, can lead to more collaboration, better productivity, and increased responsibility delegation.
Regardless of what structure works best for your organization, it’s important to set it up for success. Here are 3 steps you don’t want to miss:
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Any committee structure must have authority to make decisions on behalf of the company from the board of directors. This is where the Committee Charter (document that outlines the committee’s responsibility and authority) comes into play.
- Assign responsibilities and make sure all committee members understand their roles and responsibilities. If you bring new members into the committee ensure they get an orientation on what’s expected from them.
Typical roles include:
- Committee chair: leadership and liaison with the Board
- Vice chair: supports the chair and stands-in
- Secretary: administrative tasks
- Meet regularly (monthly is typical), and ensure at least 1 member of the committee is also a board member so they can summarize your committee actions.
One final thought, regarding this topic, don’t limit your committee to executive or leadership roles. Committees can often benefit from frontline employee involvement.
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