Stories
Compliance is a Collective Commitment, Not Just One Officer's Job
- •Compliance failures often lead to questions about the Compliance Officer's role, but the article argues this might be the wrong focus.
- •Many organizations treat compliance as a function's responsibility rather than a shared organizational commitment, making sustained compliance difficult after listing.
- •Serious compliance risks, such as insider trading or disclosure obligations, originate within various teams (business, finance, HR) and may materialize before reaching the compliance team.
- •While SEBI regulations place significant accountability on Compliance Officers, recent amendments clarify that KMPs, directors, and others must disclose relevant information to ensure compliance, indicating a shift towards shared responsibility.
- •Collective ownership of compliance involves treating it as an ecosystem, visible leadership support, risk ownership by relevant teams, rewarding compliant behaviors, and early involvement of Compliance Officers.
Key Questions Answered
Regulation 6(2) of SEBI's LODR Regulations requires the Compliance Officer to ensure conformity in both letter and spirit, along with proper procedures to support the correctness, authenticity, and comprehensiveness of the company's regulatory filings.
Amendments to Regulation 5 of the LODR Regulations in December 2024 specified that Key Managerial Personnel, directors, promoters, promoter groups, or anyone dealing with the company must disclose all relevant and necessary information to help ensure compliance.
Serious compliance risks such as insider trading triggers, stock exchange disclosure obligations, and related-party transactions typically originate within operational, business, finance, HR, procurement, or legal teams rather than the compliance function itself.
