CCOs and Law Degrees, Yet Again

One of the more lively discussions Radical Compliance sparked last year was a debate about whether compliance professionals need a law degree to have a successful career. Short answer: a nice to have, but certainly not necessary. 

Today I want to revisit that issue thanks to some fresh perspective from our friends in the finance department — who recently had a similar discussion about whether CFOs should be certified public accountants, and raised some strikingly similar points about modern executive leadership.

The post that caught my eye happened on LinkedIn, in a group that bills itself as “The Modern Finance Forum” for CFOs, corporate controllers, finance directors, and similar roles. Vincent Pagano, finance director for a business process outsourcing firm, started the ball rolling with a post last week that declared, “Should Your CFO Be a CPA? Probably Not.”

Let’s first remember what the CPA license denotes. It affirms that the person is a master of generally accepted accounting principles, and knows how to compile corporate financial statements according to GAAP. In theory you could file reports with the Securities and Exchange Commission, represent clients before the IRS, perform audits for corporate clients, and do similar tasks. 

Clearly those are skills helpful for a job as corporate CFO — but is such expertise required for a CFO, considering what the modern CFO actually does? I’ll let Pagnano take it from here… 

Being a CFO is not about debits and credits. If your “CFO” is essentially a junior accountant in a small organization, then maybe a CPA makes sense. But a true CFO leads strategy, drives business decisions, and manages financial risks. By the time you reach the C-suite, certifications don’t matter — results do. Either you already have a deep understanding of accounting, regulations, and ethics, or you got there through office politics. So why do companies still include CPA certification in CFO job descriptions?

I love that answer not only because it feels right, but because it has so, so many parallels with the challenges compliance officers face.

Strategies for Integrity vs. Tactics for Compliance

The distinction Pagnano is trying to draw out is the difference between tactics in pursuit of an immediate goal and strategy in pursuit of long-term organizational success. 

For example, a CPA license gives finance folks the tactical knowledge to work through a corporate filing or an audit, or to compare one type of debt financing to another. But that’s not the same as an ability to provide strategic advice on, say, when your company should go public, or whether to reshore your global supply chain in the face of new tariffs. 

A CPA license might help the CFO understand precisely how to implement those strategic choices — but then again, so would hiring a CPA who sits three rungs further down the org chart. The important thing for the CFO is that he or she knows the best way to add value to the organization; then others can execute that plan.

Now consider the parallels for law degrees and chief compliance officers. A law degree will absolutely help you understand many of the tactical issues that arise with specific compliance obligations, such as how to ponder the implications of a new regulation or how to conduct an investigation in a way that protects the company’s attorney-client privilege. 

But how relevant is that legal expertise for the big strategic issues that CCOs confront, such as winning support for a strong anti-corruption policy or developing the right blend of ethics training for a diverse global workforce? Not very, I’d say. The strategic vision and skills necessary to support a strong culture of integrity are quite different from the tactical expertise necessary to manage a regulatory compliance team. 

To echo Pagnano’s point, then: Why do companies still include JD requirements for CECO job descriptions?

There’s no need for it. If your compliance team encounters some difficult issue that needs legal expertise, all you need is a lawyer, not to be one. Just go down the hall and knock on the legal department’s door.

Getting to the Big Job

One wrinkle in this debate is how you rise to be a candidate for these senior roles without some qualification such as a JD or a CPA. That’s a fair question.

For example, if you want to be a CFO, at some point in your career you’ll probably need to be a VP of financial planning, or a management accountant, or a corporate controller. Those folks are the ones who put the CFO’s financial vision into practice, and they typically are well served by possessing a CPA license (or at least having a degree in corporate accounting).

By the same token, if you want to be a CCO, a tour of duty as compliance counsel or head of regulatory compliance affairs would probably look good on your resume. People in those roles are well served by possessing a JD, and ideally even an active bar license.

Compliance professionals do have a bit more maneuvering room here than our friends in the finance team, because you don’t always need a stint as compliance counsel or regulatory attorney to be a strong CCO candidate. For example, you could enter the role from an HR background; or have an outstanding record in training, policy management, anti-fraud, or other disciplines that are invaluable for ethics and compliance but don’t need law degrees. 

Still, it’s a fascinating knot of career development issues that CCO candidates need to unravel and understand somehow. What’s your advice on the best experience to reach the CCO office? Email me at mkelly@radicalcompliance.com and I’ll share (anonymized) answers in a future post.