What is the recommended relationship between a Compliance Officer and legal counsel?

The recommended relationship between a Compliance Officer and legal counsel is that the Compliance Officer should be independent. This independence is crucial for several reasons.

First, the Compliance Officer must have the autonomy to identify and address compliance issues without any potential conflicts of interest that might arise from reporting directly to legal counsel. This independence allows for impartial oversight of compliance matters, which is essential in fostering an organizational culture of ethics and integrity.

Additionally, the Compliance Officer often needs to engage with various departments and employees within the organization to promote compliance and address any issues that arise. If the Compliance Officer were to report to legal counsel, it might inhibit open communication and deter employees from voicing compliance concerns, fearing legal repercussions.

While close collaboration with legal counsel is indeed beneficial, fostering a cooperative relationship is not the same as merging roles or diminishing the Compliance Officer’s independence. This ensures that compliance efforts are taken seriously and that potential issues can be raised and tackled effectively without hesitation.