Survey Reports High CCO Turnover
A survey conducted by Russell Reynolds, the large recruiting firm, reports “startling turnover” of Chief Compliance Officers. Survey data indicates that 40% of asset management CCOs were appointed in the last 2 years. The survey also reports that nearly 60% of those appointed came from outside the firm rather than internal candidates, thereby “signaling the need for a visible shift by bringing in” outside executives. Asset management firms have also moved toward separating the compliance function from the legal function. The survey also reports increased investment in compliance functions across financial services.
OUR TAKE: Asset management firms must re-assess how to execute an effective compliance program in light of these turnover statistics and the dearth of compliance talent. When filling a CCO role, senior management should consider the compliance outsourcing model to avoid costly CCO turnover and find the expertise and depth necessary to meet increasing regulatory demands. Outsourcing may also prove much less costly and time-consuming than trying to recruit and train a new CCO every couple of years.