As part of our CCO Conversation series, we spoke with Edward Hanover, FIFA’s outgoing Chief Compliance Officer. During our time together, we discussed the path Hanover took in his career leading up to his current posting at FIFA, the challenges of building FIFA's first compliance program, and what the future of compliance will look like.
To learn more about Hanover's background and how he managed to build FIFA's first compliance program from the ground up, you can read the first part of the interview here. Below is the second part of our interview, where we dive into the future direction of compliance.
The Future of Compliance
Pauline Blondet (PB): What is your vision for compliance? Which opportunities and challenges do you see?
Edward Hanover (EH): I see compliance heading in two different directions.
First, you're going to see more and more boards of major companies adding compliance expertise on the board of directors—that’s been a gap I’ve seen in the past. For example, Carnival Cruise Lines is adding a Board of Directors member who is a compliance expert. This is a tremendous development that you, as a CCO, really want to see because this can really help companies start to make the right decisions and get the right support and challenge from their board.
Second, you're going to see the CCO role evolve more into a value supporting role for the organization, helping drive corporate culture and reputation. More and more organizations are seeing that employees are really the drivers of corporate value and that they're going to view compliance as a key function in driving those values and corporate culture. Some of these organizations, take Uber, are platforms, but to a large extent, the value of Uber is based on its brand name, its corporate culture, and its people, so they're going to need to develop and foster a culture that can support its brand and its reputation going forward. I think you're going to see compliance officers really help CEOs and presidents by developing metrics to measure corporate culture and employee engagement.
PB: Does that mean that you see a shift of compliance evolving from a box-ticking-exercise, largely focused on internal controls, to a function much more focused on corporate reputation?
EH: Exactly. The typical control function, that's going to stay, but it's going to be a very small component of the job. You will probably use technology to help drive that a lot more. It's going to be more automated. Focusing on the culture component is going to be a larger part of the compliance officer's job, or at least you could say the modern CCO’s job.
PB: How exactly do you see the role of technology in the compliance field?
EH: I always refer to finance when people ask me that question. Finance started out with the ledger—on paper. Then they started implementing things like SAP—helping to automate the function. I think you’re going to start to see that more and more in compliance. How can we use artificial intelligence? How can we use automation to drive program efficiency, to help with the training, to help with the monitoring? Using artificial intelligence to try to spot anomalies in the expense reports or spending, things like that.
That's going to free up the compliance officer's time to focus strategically on, "All right, how do we do drive corporate culture?", as opposed to manually going through expense reports, manually going through monitoring exercises. By focusing on this type of information you will be able to say: “Okay, these are anomalies we're seeing in the organization, this is where you need to spend your time.”
Compliance Commando Tip
PB: What is the best tip you have for your compliance peers to make their daily lives a little easier?
EH: It's developing personal relationships with your stakeholders, which are the lines of business. The more you understand what they're doing, the more they have time for you, and the more they have your agenda fit with their agenda.
When a marketing person comes up with a marketing plan, they have to convince the president why it makes sense. Compliance needs to develop that same skill set. If you build relationships with internal stakeholders, including Sales, Marketing, Finance, and R&D, they will mirror what you say to the president. "Yes, Ed's team, they do help us. Please make sure you give them the budget they need because they enable us to do what we need to do." If you can get to that point, you're very successful in your role. Whereas if you're in a role where everyone's saying, "No, no, no, the budget is too high, we need to cut this. Who cares about compliance!"—that Chief Compliance Officer is not successful in that role.
More CCO Conversations
We want to thank Hanover for taking the time out of his busy schedule to talk to us about his experiences in the field of compliance. We hope you have found his insights to be valuable. To stay up-to-date on the latest CCO content, make sure you are following us on LinkedIn and Twitter.
If you enjoyed this conversation you might also be interested in our interview with Kim Yapchai, CCEO at Tenneco, a Fortune 200 automotive manufacturer. She is a powerhouse in the industry who shared her thoughts on changing corporate culture and more.
