Hiring the Right Compliance and Ethics Officer
In today’s highly regulated healthcare environment, establishing an effective compliance program is essential for healthcare providers, pharmaceutical and medical device companies. Equally important to the organization’s compliance and ethics program is the leadership assigned to oversee it. When selecting potential candidate(s), it’s critical to outline the desired qualities and know how these fit into the compliance culture of your institution.
Culture of Compliance
One of the first questions to ask before commencing your search is what is the compliance culture of your institution? Is your organization compliant because it has to be, or is it an important part of your organizational culture to do the proper activities at all times? Consider if your compliance and ethics program is viewed as an expense or investment. Knowing the answer to these questions can help match the traits and experiences of your Chief Compliance and Ethics Officer to your organizational beliefs and culture.
Programs that are reactive in their compliance efforts and fail to follow governmental guidance and industry best practice are often looking for someone to occupy a position doing baseline compliance and ethics work. Organizations with a culture dedicated to compliance as a core value will have a number of qualities to consider when targeting candidates for the position. The selection of a Chief Compliance and Ethics Officer for proactive institutions will require finding candidates who exhibit qualities, such as those listed below, to ensure a state-of-the-art program.
Required Qualities of Compliance and Ethics Officers
Your compliance officer must be capable of managing both people and resources. This includes leading a department with several different moving parts, a skilled professional staff, an operating budget and any required technology and tools. Some associate this with being able to “coach” or build a team. This is particularly important in the compliance and ethics space because these individuals (if structured properly) will function independently of almost all other reporting relationships in your organization. A department leader must have prior management experience with a similar type of activity.
One of the big misconceptions about skilled compliance officers is the need to be “like a policeman at all times.” Certainly, there are times when looking for violations of the rules/policy must occur, but the best compliance officers are those who can appreciate the concerns of others and have a dialogue about decisions to be made. They need to be respected by their organizational peers, and that respect must be earned. In this situation, a candidate with prior sales or marketing experience can be a good fit for a compliance officer. Such a candidate will often understand how to relate to people in a respectable manner and tone.
Compliance and Ethics Officers are often required to make presentations in front of the board, leadership, sales team, staff and occasionally external parties. It is essential they be able to do so in a dynamic and competent manner. As the compliance/ethics face of your organization, the compliance officer will be your primary “sales person” to keep people informed about the compliance program, explain why it must be followed and promote it both internally and externally.
Compliance Experience/Industry Knowledge
How to interpret these qualities always stirs debate among those hiring, especially when deciding if this position should be filled from internal or external candidates. For example, a device company might determine they need someone who knows the product inside and out and already understands the culture of the company. Product knowledge is valuable, but you should not limit the pool of candidates to just these people. When searching for a compliance and ethics leader, you should look for someone with compliance and ethics leadership experience first and foremost. The product can be learned. Also, though it may sound counterintuitive, consider candidates who do not know your culture. Your compliance officer will be an independent executive in your organization, and external candidates could be a real asset for spotting program weak spots or potential opportunities.
Ability to Work Independently
Although it’s important for a potential compliance officer to be adept at building relationships, this does not mean you are looking for someone who is dependent on others. In fact, it is critically important that you find candidates who are comfortable being independent. An experienced compliance officer will understand this and not look to make any personal friendships that could conflict with his or her duties.
It is not uncommon to see intelligent individuals fail as compliance officers because they lack the skills needed to handle issues carefully or because they treat every event as a crisis. You need to have an individual who knows when to press the panic button and how to deal appropriately with less serious, non-urgent situations.
There is no straightforward or right answer when it comes to educational requirements. It will be unique to each organization. Those with advanced business degrees who possess the qualities listed above and diverse compliance leadership experience can be very appropriate for these roles. However, attorneys can also make great compliance and ethics officers, but it is critical they are not subservient to the General Counsel. They must be able to hold their ground against being influenced by the Legal Department.
Ability to Say “No” to C-suite
Look for individuals who are experienced in dealing with sensitive situations and have shown the ability to rectify them. This could include situations when leadership didn’t agree with recommended actions. Knowing if a potential candidate will present a problem and not back away from any difficult discussions to ensure you are doing the right thing is essential.
Where to Find Candidates
The easy answer is from your competitors. A more forward-thinking approach is to consider candidates from other parts of the healthcare industry, such as hospitals. Very few segments of the market have been as regulated as healthcare providers who have been under compliance guidance since the mid-90s. Experienced compliance officers in this market who have been under Corporate Integrity Agreements with the Department of Health and Human Services, run large-scale compliance and ethics programs and worked with complex organizational governance structures are attractive candidates.
Utilizing these qualities when reviewing potential candidates will help your organization find the best person to take on the critically important role of managing your organization’s compliance and ethics program.