When you hear the phrase “risk, compliance, or legal division,” it often conjures images of back-office, control-intensive roles that focus on triage and keeping people and decision-making processes in line. While this describes aspects of these functions’ scopes of responsibilities, there is much more to these roles. Leaders of regulatory-focused business units not only tackle control and enforcement-related work, but influence and collaborate with broad sets of stakeholders, inspire diverse teams of experts, and develop and road-test new strategies as business operations become increasingly global, nuanced, and sophisticated.
Despite their multifaceted prowess, these leaders are often overlooked for broader executive roles and are a source of untapped potential talent within organizations across sectors. Part of the reason may stem from organizational structures, with these functions often layered under other departments or, depending on the size of the organization, grouped with other “back office” functions and not seen as the strategic thought partners that they already are.
In our experience, there are many reasons why Risk, Legal, and Compliance leaders make great executives, but the top five are:
- They lead some of the most diverse teams within organizations. Regulatory and control units combine former functional talent, regulators, product heads, and more. The ability to instill purpose, inspire teams, and develop individual talent across such varied skills sets is a true gift and one that is directly applicable in broader leadership roles.
- Their storytelling and influencing abilities are second to none. Building trust and collaborating with diverse constituents, from business unit heads to regulators to board members, is no small feat and these leaders do this as part of their daily to-do list.
- They are simultaneously able to be strategic and to execute. Regulatory leaders don’t just develop ideas and task others to carry them out. They create the strategies, test them, and take action as needed.
- They have deep connections across their organizations. These leaders have strong ties to the business, are aware of all the pain points, and know with whom to work and how to deliver real results and have a meaningful impact.
- They know how to drive culture change. Companies of all sizes and across all sectors need a strong culture when it comes to ethics—one where there is a commitment from the entire organization to appropriately manage risks and implement controls to ensure behavior and decision-making that is aligned with the company’s mission and purpose. Regulatory-focused divisions play a key role in ensuring that culture permeates the entire entity.
This isn’t to say that there aren’t areas for growth and development that can further help to prepare these leaders for broader roles. Part of the challenge will be introspective—it can be tempting to stay in a vertical or a role that is relatively comfortable and that one knows inside and out. Shedding self-imposed limitations and recognizing their capacity to be valuable assets more broadly is the first step for these leaders to establish themselves as business partners, not only cost centers to the organization.
There may also be a need to expand their lens on strategy. These leaders can easily set strategies within their realms but need to be able to expand these to the enterprise level and demonstrate how the work they do fits into larger organizational goals.
Shedding self-imposed limitations and recognizing their capacity to be valuable assets more broadly is the first step for Risk, Regulatory and Compliance leaders to establish themselves as business partners, not only cost centers to the organization. The operating environment has changed, elevating the strategic importance of what they do, coupled with their increasing commercial capabilities, making it the right time to break out of the back-office box and into driving growth, innovation, and strategic initiatives.
