Wall Street Journal Law Blog: Compensation, Yes; Compliance, Maybe

Originally Published in The Wall Street Journal Law Blog | December 10, 2012 | By Jennifer Smith

Compliance may be a hot area for in-house lawyers–and the pay isn’t bad–but that doesn’t mean the folks heading up those departments have all the tools they need to keep corporations out of regulatory hot water.

A poll of 48 attendees at an October conference for compliance officers found that nearly half said they lack sufficient resources to manage an effective program.

And 55%  said company programs intended to appraise employees’ behavior and reward them for acting ethically—say, for not bribing foreign officials—don’ t actually do much to minimize corporate risk.

“Are employees penalized if they grease the wheels, or if a manager looks the other way?” said Paul Mandell, chief executive officer of  Consero Group LLC, which organized the conference and conducted the survey.

In other words, do compliance programs have teeth? Are there carrots to give incentives for doing the right thing, and sticks to be used when ethics slip?

“You can invest in training, you can invest in research to understand what the rules are,” Mr. Mandell said. “But if you get caught trying to bribe a port official to try and get the company’s product in faster, and there is no punishment…  It’s a much tougher challenge to get people to take the compliance job seriously.”

So are compliance officers, the Rodney Dangerfields of the in-house bar, getting no respect?

Not necessarily—at least when it comes to pay.

The survey notes that “the chief compliance officers surveyed are a relatively well-compensated group, comparing favorably to other C-level executives. With salaries ranging from $150,000 to over $250,000, the average surveyed participant has a salary of over $200,000, with nearly half of all respondents earning $225,000 or more.”

Download the 2012 Chief Compliance Officer Data Survey [PDF]