During ProBank Education Services’ Spring Regulatory Compliance Conference, regulators shared that institutional approaches to succession planning for compliance officers were at the top of their minds.
As you know, compliance officers have vast responsibilities at their respective organizations. Whether it be monitoring regulatory change, managing examinations, advising business unit partners, or responding to customer complaints, their key role is sheltering the financial institution from regulatory risk.
Whenever compliance officers move on e.g., announcing their retirement, winning the lottery, or deciding to raise chickens in the countryside, planning changes in compliance risk roles can arise.
Still, many institutions lack a succession plan for compliance officers. Their reasoning can come down to a chicken or the egg dilemma: Does an organization wait until they have the right person before creating a succession plan, or do they create a plan in hopes that the right individual will appear?
Neither strategy works well when regulators come home to roost. Indecision leads to inaction, which can create regulatory gaps or leadership instability.
Instead, we encourage institutions to focus on leadership consistency in risk and compliance functions with a slightly different approach.
First, define the role. Be able to answer the questions: What does your compliance officer do, and what qualities or skills do you need currently (and what skills might you need in the future)?
Next, find a golden egg. Look internally for individuals at your organization who possess those skills. Begin mentoring individuals now and include them in regulatory conversations in order to expose them to learning opportunities.
Then, cross-train. In a smaller institution, all hands (or wings) are on deck. Cross-training team members can help foster individual growth and institutional continuity during transition periods. Even if the role is temporary, it can keep operations running smoothly.
Lastly, engage the board. Succession planning isn’t just for compliance. It is for the entire institution. A company’s board has its strategic vision. Therefore, it is essential to include that vision in your succession planning. That way, the board and your company’s plan align on supporting the placement of the right individuals in the right place for growth and continuity.
It is important to remember that succession planning isn’t about having all the right answers or even all the right people lined up today. It is about asking the right questions and showing foresight, not flawless execution. Crossing fingers or waiting until the need arises will only deepen the chicken or the egg dilemma and leave institutions vulnerable.
Regulators are not looking for perfection; they are looking for intention. A perfect plan is not required, but a thoughtful plan that considers compliance risks and demonstrates proactive thinking shows that institutions are both reacting to change and preparing for it.
For more information on succession planning or compliance officer questions, please reach out to a professional at Forvis Mazars.
In addition, join us from September 8–12 for our 2025 Regulatory Compliance Conference in Destin/Miramar Beach, Florida! Event discussions will center on relevant topics, such as trending deposit, lending, AML/BSA, and compliance risk management. We hope to see you there!