Rachael Giannetti on The Difference Between Compliance and Law

Many people think that compliance officers and legal counsel have the same goal. The truth is, they have different functions and must be kept separate from each other. This does not mean that compliance officers and legal counsel should not cooperate. It merely means that they serve different roles that must work in harmony with one another if a company is to be legally and ethically in the right.

Compliance Professionals
Compliance officers are responsible for setting and enforcing company policies and procedures. For example, if an employee witnesses or suspects that the company or a coworker is committing fraud, a compliance officer would outline how it would be reported and launch an investigation. They are also responsible for setting ethical guidelines at the company, which set a tone for employee behavior on the job.

A compliance officer is a decision-maker. They decide what happens when an employee breaks company regulations. For example, they may outline what behavior or action will result in termination, suspension and fines. A compliance officer may also be tasked with correcting unethical behavior that is occurring at the company. They may have to set out new policies or procedures as a result of employee theft, fraud, negative publicity and consumer demands.

Legal Counsel
Legal counsel is primarily concerned with the law. They do not decide which policies or actions to take and implement, this is left to executives and compliance officers. The legal counsel is true to its name in that it advises decision-makers on what action can and should be done as it relates to the law.

In almost all cases, legal counsel will be made up of one or more attorneys. These attorneys will typically specialize in the field of law or business that the company is involved in. A bank will want someone who has in-depth knowledge of banking regulations and financial law in their legal counsel.

The purpose of legal counsel is to be an advisor. Their advice should be taken to make sure that the company's actions follow the law. Compliance officers don't deal directly with the law. Instead, they implement company policies that reduce the risk of breaking a law and make sure they are followed.

It is important that the legal counsel and compliance officer work together. Following legal guidelines may still lead to unethical behavior that can be catastrophic for a company. At the same time, compliance officers must make sure they follow the laws to avoid being sued for breaking the law. Giving equal weight to legal counsel and compliance officers is the best way to ensure that you are following the law and have ethical guidelines in place.

Originally posted on RachaelGiannetti.com.

Rachael Giannetti is a compliance manager for a registered New York, Florida, and New Jersey Mortgage Broker specializing in residential loans. Since her start with the company in 2011, she has been instrumental in numerous implementations and developments, and credits her success to her ability to stay on top of compliance news and trends. Where many find compliance to be arduous, Rachael loves the opportunity to face challenges and find the perfect solution. Giannetti earned her Bachelor's degree in Public Relations from Hofstra University, where she also minored in Political Science. She then attended the University of Bridgeport where she earned a Master of Science in Education, completing her graduate degree. For all things compliance, be sure to visit her website at RachaelGiannetti.com.