In the world of compliance there is often confusion between those who are accountable for compliance and those who are responsible. You may have heard it said that everyone is responsible for compliance or safety or quality – you can “fill in the blank”. At a high level this makes sense. However, when looking more closely, we know that responsibilities are distributed across an organization often aligned with managerial accountability and specialized roles needed to meet each obligation. Everyone might be responsible but not everyone has the same responsibility.
From the many compliance roles that exist there is one that is unlike the others and often overlooked — the role of an Obligation Owner.
In this article we explore what an Obligation Owner is, their responsibilities, and how important this role is for compliance success.
What is an Obligation Owner?
An Obligation Owner is an individual with delegated or assigned authority to answer for an organization's compliance obligations. These obligations may consist of legal requirements, industry regulations, internal policies, and ethical standards that the organization must adhere to. The Obligation Owner serves as a central point of contact, coordination, and oversight for compliance-related matters within the scope of the obligations they own.
The RACI (Responsible, Accountable, Consulted, Informed) model is a framework that defines roles and responsibilities for tasks and processes within an organization. The Obligation Owner aligns with this model by assuming the role of the "Accountable" party for compliance obligations. Accountability for obligations are often aligned with managerial accountability.
The Obligation Owner promotes accountability by establishing clear objectives, documenting policies and procedures, establishing lines of responsibilities, and tracking progress. They hold individuals and teams responsible for their compliance-related tasks and actions as specified using a responsibility assignment matrix.
Regularly monitoring compliance efforts, providing feedback, and recognizing achievements encourages a proactive mindset among employees, empowering them to make and keep promises (commitments) associated with obligations.
What are the Responsibilities of Obligation Owners?
While Obligation Owners take on obligation accountability they are also responsible to ensure the work of compliance happens. This includes identifying objectives and setting appropriate targets and goals.
Once compliance objectives are identified, the Obligation Owner must ensure that they are documented and communicated effectively throughout the organization. This includes creating policies, procedures, and guidelines that outline the expectations and commitments for each obligation.
Obligation Owners must also ensure collaboration with various stakeholders, such as legal teams, department managers, and subject matter experts, to properly align with each obligations. They will also need to provide guidance and support for those who are responsible to meet each obligation. This is enabled by cultivating a culture of collaboration and pro-activity.
Obligation Owners also play a critical role in monitoring compliance efforts within the organization. They need to ensure processes are in place for ongoing monitoring, regular audits and assessments, and review of compliance metrics to identify any non-compliance issues along with areas of improvement and risk. When necessary corrective and preventative actions are taken to make certain the organization always stays between the lines and ahead of risk with respect to each obligation.
The Importance of Obligation Owners
The role of an Obligation Owner is often overlooked but is indispensable in achieving and maintaining compliance within organizations.
Through the efforts of Obligation Owners, organizations can ensure adherence to legal requirements, industry standards, ethical practices and internal obligation requirements minimizing compliance risks.
By assuming accountability for obligations they make certain that obligation objectives are achieved and the other roles of the RACI model are filled and conducted effectively.
Now, you might be wondering who should own each obligation and how best to organize the responsibilities to leverage common capabilities, competencies and capacities. The answer to those questions is a topic of another blog post, so stay tuned.