Growth and stricter enforcement of anti-bribery and anti-corruption legislation in the United States and Europe, and the rapid expansion of multinational corporations in Asia, are fuelling the global demand for senior legal and compliance professionals in the corporate sector. In the process, the profession is being transformed.
“With the Foreign Corrupt Practices Act (FCPA) taking a close regulatory watch over US companies or foreign companies listed in the US, and with the mainland continuing to be a strong focal point for business growth in Asia, we are seeing compliance and corporate governance to be a key hiring area within the in-house corporate market for Asia,” says Gerard Finlay, director and partner of international legal and compliance recruiters Legal Futures.
This year, the demand has been “compliance, compliance, compliance” at very senior levels in Hong Kong, the mainland, Singapore and elsewhere, he adds. Some of the hires are replacement roles while others are for new positions. Demand for senior compliance officers with regional or Asia-wide responsibilities is very strong, Finlay says.
In-house demand for mid-level to senior trade and operation compliance skills is high, particularly with regards to covering anti-bribery, anti-corruption and matters related to the FCPA, says Olga Yung, senior consultant for legal at international recruitment firm Michael Page.
The FCPA, introduced in 1997, has become increasingly stricter over the years, along with similar legislation such as the UK Bribery Act and the US Sarbanes-Oxley Act. Increasing use of foreign anti-corruption legislation against various multinationals with operations in China and elsewhere in Asia in recent years has heightened organisations’ sensitivity and eagerness to embrace compliance.
All stakeholders are anxious to get it right, says Finlay. “The way the FCPA and the UK Bribery Act and Enron and Sarbanes-Oxley have whipped the market into shape has made shareholders very sensitive. If there is anything unethical – even if not necessarily illegal – about a company, they get very nervous,” he adds.
Fear of the toll that falling out of compliance will have on an organisation’s reputation and its bottom line is transforming the role of compliance and giving it a much higher profile.
As a result, the role of the compliance officer is evolving from being purely functionary a decade-and-a-half ago, with a reporting line to the legal counsel. It now involves a more high-profile position, with direct access to the board of management, says Finlay.
“In fact, the senior compliance role can be even closer to the top now than the legal one. We are seeing demand for very top-level compliance specialists, with regional responsibilities, reporting to legal and to the board,” he says.
Michael Page is seeing demand from mid- to senior-level roles. “It is a relatively new role,” Yung says. “In the past, compliance was considered a mundane position, but with all the changes in recent years, the function is being transformed. Now, talent faces challenges in a relatively new area as they would be looking at things not done in Asia in the past, and so their main challenge would be to handle new issues, report back to head office in the US, and to work with their regional counterparts on how to deal with these issues on a local basis with local regulations in place.”
Many recruits would be from a legal background as the role is a mix of compliance and legal responsibilities, says Yung. However, for these hires, as the new role involves a lateral move, they will not be able to reap the benefits of a huge salary increment.
“MBA qualifications are also in demand in some industries,” says Finlay. “Some clients say compliance is closer to business than the legal role because it always deals with management and the business. The compliance professional... defines what can and cannot be done. Compliance landscapes the whole business.”
Today, the senior compliance officer is tasked with managing all compliance issues within an organisation, encompassing corporate governance, company secretarial and legal. He or she makes sure the organisation is adhering to all the relevant laws and regulations, and that all in-house policies, guidelines and practice are compliant. The role is a step up from that of the traditional legal counsel, company secretary or corporate governance officer.
This is why some people go straight into compliance soon after getting their legal qualifications, Finlay says. Despite having a slew of legal qualifications, they usually stay in compliance, with no intention to switch over to legal.
Companies will have to be smart to attract and retain good talent. “From the employee-employer perspective, we are seeing that the really good candidates are also very selective – they demand a very high character from their employer and will not join a company with an underdeveloped or vague compliance programme,” says Finlay.
Yung notes that several US multinationals have been grooming people in Hong Kong so the city has a pool of compliance professionals.
“Compliance talent in technology, info-tech and tech manufacturing are seeing the highest demand,” says Yung. “Nevertheless, there is a massive shortage of FCPA compliance specialists who are also legally qualified, trained in business and are fluent in English, Cantonese and Mandarin.”
Finlay notes that company secretarial and governance talent have always existed, so organisations train up their in-house legal and corporate governance talent to assume new roles. It’s a matter of mastering the FCPA and other legislation and requirements, and knowing the business in and out, he adds.
