Governance Gauge: Hail To The Compliance ChiefsGovernance Gauge: Hail To The Compliance Chiefs

Following passage of the Sarbanes-Oxley Act (SOX), the chief compliance officer (CCO) changed from an obscure role confined to certain industries to one that's both more common and more burdened with requirements. More than half of the Fortune 100 have created C-level ethics and compliance positions to set standards of conduct and mitigate risk. The CCO must prevent internal actions and "willful blindness" that would invoke civil or criminal punishment-ignorance is no longer an excuse. In addition to ensuring legal statutes are followed scrupulously, the CCO also faces the nebulous challenge of nurturing a culture of ethical behavior. "Culture trumps compliance," says Keith Darcy, acting executive director for the Ethics Officer Association (eoa.org).

As CCOs wrestle with the definitions of corporate ethics and culture, spending will increase. "We live in an age of information, so protecting that information with technology is essential to risk management," says R. William Ide, formerly CCO at Monsanto and now a partner with McKenna, Long and Aldrich, a law firm specializing in corporate governance and compliance. Ide notes that CCOs must be tech savvy and business oriented. CCOs can't get away with just knowing the law. CCOs must use inventory systems and data analysis to spot dangerous trends and demand attention if intellectual property is at risk.