LEGAL COMPLIANCE OFFICER: AN INCREASINGLY DEMANDED PROFILE
The reform of article 31 bis of the Penal Code has resulted in the proliferation of a new job, Legal Compliance Officer. Companies are increasingly incorporating a new Corporate Compliance department, or outsourcing this service to Criminal and Business Law professionals. Their function is to ensure regulatory compliance internally and reduce the chances of the company incurring legal and criminal liability. For instance, in the case of an employee committing an offence, intentionally or not, by ignorance of the rules that operate in each country, as a result of the legal reform undertaken in 2015, a violation of this type could lead to personal responsibilities on the directors or managers of a company.
1. Main characteristics of the Legal Compliance Officer
Autonomy: autonomous power over initiative and control.
Two-directional information: Internally, different departments in the company will have to inform him/her about the possible risks and daily non-compliances that could take place in the company.
Supervisor: is in charge of supervising all company activities, ensuring they are protected correctly according to the prevention model.
Actual position: someone with broad capabilities and mechanisms for action[1].
Supervised body: the person in charge of the company must, in turn, control and supervise the work of the Compliance Officer.
2. What is the role of the Legal Compliance Officer?
The Spanish term for the Legal Compliance Officer is “Director de Cumplimiento Normativo”. Their function is to monitor and control the possible commission of business crimes and detect criminal conduct in the company, both from a legal, ethical and moral point of view. Therefore, it is necessary to design and implement a criminal risk prevention program.
The main functions are:
Prevention: unilateral intervention advising company departments with appropriate awareness campaigns (ethically or legally).
Legal advice: as an expert on the regulatory compliance program, he/she can issue reports or opinions requested by other company bodies.
Receipt of complaints: he/she must have an effective complaints channel, so that anyone can report freely, and the case is investigated immediately.
The Legal Compliance Officer must base his/her work on corporate transparency and documentary evidence that has carried out no omissions of legal duty at any time. In order to avoid a possible criminal liability of the legal entity, his/her role should be to supervise that, from the top management (Board of Directors) to the last link in the production chain, suppliers and subcontractors (external collaborators), all act according to the rules and principles of business ethics.
Regarding Spain, although SMEs reach a high degree of outsourcing of their services, there is still no corporate culture in which legal control over their suppliers predominates. This is a challenge to overcome in the coming years.
Specific functions of the Legal Compliance Officer
Analysis and identification of possible legal threats and weaknesses in the company.
Assessment of criminal risks that could involve internal changes at production level, control and marketing procedures such as statutory or organisational changes. In this case, the Board of Directors will be informed with reports to rectify anomalies and/or inform the members of the company with courses or days.
Design a response model to deal with irregular attitudes and behaviours and evaluate their results. All of this will promote the constant maintenance of the established prevention model, so that it always works properly.
3. Know how to manage legal risk: required profile and training
For the development of this new job, the appropriate profile would be a professional expert (lawyer) in matters of normative compliance, with the support of other technicians and supervisors of the company. His/her training provides a sufficient basis for interpreting the rules and contracts and drafting the clauses with which to avoid the criminal responsibility of the legal person. He/she must be a trustworthy and honest person, committed to the ethical and moral values of the company, communicative and empathetic.
In this sense, the experts point out that outsourcing this function is beneficial (especially for smaller companies). Benefits of outsourcing are, among others:
Cost savings.
More objectivity is given to the control process.
Gain independence and specialisation of the Compliance Officer.
Greater acceptance by the staff of external control, rather than internal.
In Spain, a high percentage of companies do not know the importance of regulatory compliance. Although the degree of penetration of other countries (such as the United States, Italy, England or Germany) has not yet been reached, currently, having a Legal Compliance Officer adds value to the business strategy. A real need, regardless of the size of the company or the market in which it operates.
[1] In this regard, take into account that the lawmaker envisaged article 286-6 of the Criminal Code, that it will be a crime when those responsible for the company are not especially careful and responsible “with the hiring and supervision of inspection and control personnel”.