Due Diligence Questions Chief Compliance Officers Should Ask in a Job Interview

In today’s regulatory climate, the Chief Compliance Officer faces increased personal liability for corporate wrongdoing. There are ways CCO’s can minimize personal risk on the job — but the process begins before accepting a CCO job offer in the first place.

Just as CCOs perform due diligence with third parties on behalf of their employers, they must perform their own due diligence on any potential employer during a job interview.

As a compliance-focused executive recruiter, I know the Yates Memo isn’t simply changing the way CCO’s do their jobs; it’s changing the way they look for jobs – so I asked compliance professionals around the world this month to share their best due diligence questions.

What follows is an aggregate of questions candidates have recently asked management and Boards when being considered for a CCO role with a new employer. The list is unedited and unfiltered – their words to your ears.

Here we go:

• Why is the position open?
• If someone was previously in the position, what were the circumstances of his/her departure?
• Prior to hiring me, would you permit me to meet privately with the chair of the board or committee responsible for compliance oversight?
• What keeps you up at night?
• For any prior government sanctioned infraction, what are the lessons learned? What changes have been made?
• What do you believe to be the greatest regulatory compliance risks facing the company?
• What do you believe to be the greatest business risks facing the company?
• What do you believe to be the greatest geographic risks facing the company?
• Describe the relationship between the company and the regulators
• What are the main challenges for a CCO in the coming nine months?
• Are there any areas where the compliance program is not meeting management or board expectations?
• Do you believe employees are comfortable in reporting potential ethical/compliance infractions?
• Have you ever had an outside evaluation of your compliance program?
• Is there anything you believe management can do to support the compliance program?
• What is the budget/staffing for the Compliance function?
• What are the reporting lines for the role?
• Can the CCO veto a Due Diligence target?
• At what stage is the compliance department involved in establishing a relationship with a business partner?
• At what stage is the compliance department involved in the M&A process?
• Is it customary for the CCO to sit in operations meetings pertaining to new products and market initiatives so as to advise the business on risk?
• What role do you see Compliance playing in management meetings?
• What is the formal frequency of reporting to the Board and what is the policy for Board reporting on an as needed basis?
• Have executives in your organization ever walked away from a business opportunity for ethical and/or compliance concerns?
• Do you feel ethics/compliance is an essential part of a successful business or something that’s just a reality you have to deal with these days?
• Do you think that ethical business practices do in fact lead to a more successful business if done the right way?
• How do you view the compliance officer – as part of the business or an external function?
• What did or didn’t you like about working with their former CCO?
• What sort of questions have you raised to the previous Compliance Officer?   Have questions been purely technical or have they extended to broader business practices?
• What do you and Board leadership think about regulatory compliance risk and whether it is viewed proactive or only reactively?
• How do you think compliance can be a strategic partner in achieving your goals? Is it more just “keep us out of trouble?”
• Are there ways you believe the compliance program could be a strategic advantage for the company in terms of its health and growth?
• How would you describe the values of the leadership team and what does the tone at the top look like?
• Who has authority to fire me?
• What are you offering in the way of liability protection?
• Am I free to engage my own counsel if necessary in a response to a government investigation?
• Can I go to outside counsel on issues before discussing with General Counsel?

Have you road-tested any due diligence questions in a compliance job interview? The threat of personal liability will drive the importance of the due diligence process, so this list of questions can – and will – grow and change in the coming months and years.