Tips and Tricks for CCOs: Key Learnings from 2020

Tips and Tricks for Chief Compliance Officers: Key Learnings from 2020

For many CCOs, 2020 will be defined as the year of disruption. The threat of COVID-19 loomed large, altering not just business operations, but our day-to-day lives. A lot of companies temporarily closed their office doors and transitioned to a remote work environment, and CCOs had to rely on virtual check-ins for transparency and collaboration with teammates. Concerns about cybersecurity attacks and confidentiality breaches took center stage, and more than a few CCOs had to once again remind employees to avoid phishing scams.

Despite these challenges, we’ve seen how resilient CCOs can be in the face of unprecedented change. If there’s any silver lining, it’s that even as anxiety became the common mood, CCOs found creative ways to meet regulatory requirements. Below are some of the key lessons learned in 2020, as told by the industry’s top Compliance leaders.

Lesson #1: Be adaptable to change

For many CCOs, COVID-19 caused a significant shift in operations. For some, the transition to remote working made training more difficult. For others, a lack of interaction in the office meant fewer opportunities to offer friendly reminders of overdue tasks. Whatever the case, CCOs had to adapt to new working environments, all while maintaining the standard of compliance regulators have come to expect.

Helen McAuley of Breckinridge Capital Advisors argues that “flexibility, creativity, and being nimble” are important traits for any CCO to cultivate. As you think about your compliance program in 2021, be sure to make room for the unexpected.

Lesson #2: Compliance needs technology more than ever

One way to adapt is to leverage technology whenever possible. In 2020, the CCOs we spoke with came up with scalable ways to maintain compliance in a remote work environment.

In our latest webinar on The State of Private Equity Compliance, John McGuinness, CCO of The StepStone Group, explained how he revamped his firm’s approach to onboarding by uploading online training videos for employees. Kelly Pettit, CCO and Associate General Counsel of General Atlantic, discusses how her firm conducted online training sessions to meet the moment. Both are great examples of using tech tools to compensate for the in-person experience.

Kate Surala, CCO of The Analyst, also had to change her firm’s priorities as a result of COVID-19. Like many CCOs, she stopped relying on a paper-based system to complete compliance tasks. “We have introduced an online system with ComplySci and it has transformed the paper-based system we had in place. Especially now, as we all face COVID-19 and our teams are working remotely, I can’t imagine how we’d process different requests. I would be spending hours on request phone calls and documentation alone.”

Lesson #3: The problems before COVID-19 didn’t disappear

COVID-19 put numerous business initiatives on pause and even caused regulators to extend important deadlines, but many of the stresses keeping CCOs at night have intensified.

For example, although the FCA has extended the deadline for issuing Fitness and Propriety (F&P) certificates and training all staff on SM&CR expectations and obligations of the Conduct Rules, at some point, firms will need a plan. That’s what Dan Ridler, Managing Director at BCS Consulting, wants firms to understand in relation to building an SM&CR operating model. He writes,“With the unprecedented remote working arrangements firms have found themselves in during 2020, there is likely to have been significant changes in people, roles, and responsibilities across businesses which will have impacted Certification and Conduct Rule populations. Firms that have not been able to keep on top of these population changes in a controlled and coordinated manner will find these final implementation activities far more complex and time-consuming than initially anticipated.”

Geopolitical challenges aren’t going away either. Beate Born, Executive Director of Risk and Regulatory Management at UBS, reminds CCOs to think about what Brexit will mean for current EU market access and potential equivalence provisions, or what a new presidential administration could mean for U.S. sustainability regulations.

In short, when the COVID-19 dust settles the issues that concerned CCOs before the pandemic will continue to be top of mind.  

Lesson #4: It’s never too early to plan ahead

Despite the challenges CCOs faced in 2020, many have plans to enhance their compliance programs in the new year.

According to our latest client survey, 41% of firms will be adding vendor risk management to their compliance program, more than any other initiative. This makes sense given the increased necessity of cybersecurity and business continuity in a remote work environment.

In addition, firms are thinking about how to effectively manage data, especially as it relates to material non-public information (MNPI) and conflict of interest monitoring. Nick Tassell and Natassia Kourousi, Compliance leaders at Montagu Private Equity, consider this to be a major priority for 2021. Whether it’s building a dedicated Control Room function, or implementing conflict management procedures to proactively identify risks and ensure compliance, understanding and analyzing data results will be crucial.

As you plan for 2021, request a demo of ComplySci to reduce risks in an uncertain world.