Griffin Takes on Chief Compliance Duties for SEC

Lora Bentley

The Securities and Exchange Commission has a new chief compliance officer. Kathleen Griffin comes to the newly created position following her tenure as senior compliance manager for Putnam Investments, and as Compliance Week's Matt Kelly pointed out Friday, Griffin's arrival marks the latest in a series of changes the commission is making to improve its internal compliance efforts.


Though he says Griffin is perfectly capable of doing the job well, Kelly also says Griffin already has a strike against her. She doesn't report directly to SEC Chair Mary Schapiro. Instead, she reports to the agency's chief ethics counsel, William Lenox.


That's a problem because the SEC itself recommends that companies give their compliance officers or audit chiefs as much independence as possible, with direct and easy access to the top line of management, if not the board of directors. Not giving Griffin that independence rather undercuts her authority.


Kelly writes:

The SEC constantly stresses the importance of tone at the top, which is a diplomatic way of saying "appearance matters." You set a strong tone for compliance by appointing a chief compliance officer with broad responsibility for ethical behavior and clear, direct access to senior management. If that's good enough for the SEC to impose on the companies it regulates, it's good enough for the SEC itself.

The advice is written into guidance offered by the Institute of Internal Auditors and will also be included in the newest version of the federal sentencing guidelines.

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