When should the compliance officer resign?

It is a question you hope you never have to answer, but one that can be part of the risks of being in compliance and ethics (“C&E”):  as a chief ethics and compliance officer (“CECO”), when should you consider resigning from your position.  This is not about routine retirement decisions, or whether to accept a more attractive offer elsewhere. Rather, the question is whether to leave as a last resort.[1]

Circumstances where you may believe you should leave.

When could this difficult decision arise? There may be circumstances where you are pressed to have direct involvement in a crime or other misconduct where you may face personal liability.  For example, you may be told to sign off on false certifications to the government. 

There may also be instances where you could face liability for not implementing the program – where programs are legally required.  This could be the case under a program imposed by the government or a court in the context of a government enforcement action.  It could also come under government rules that mandate compliance programs in your industry, such as program steps required under SEC rules or banking requirements.

In a somewhat related point, you may be being set up as a scapegoat to take the fall for those with the real power in the organization.  You may realize that you and the program are not real, but are only window dressing, being used by the company to build undeserved corporate credibility and reputation.  For example, there might be a scheme to achieve ISO certification, but only through a superficial program with no real substance.

You could be subject to retaliation for protecting whistleblowers, for challenging executive level wrongdoing, or just persisting in your job.

You may also be experiencing the frustration of being ignored, with no power or influence to really affect what happens in the company. 

While this list of reasons may be daunting (and hopefully no one who reads this will have suffered through everything in the list), there is an important caveat that must be considered and adds a painful amount of conflict to the decision.  Resigning should never be done lightly.  Standing up for what is right and taking some hits goes with the job.  Being known as someone who does not quit may be just the thing that deters others from misconduct.  You may be the only dam that is holding back even more wrongdoing.  Anyone considering this decision needs to ask first this question:  Are you sure there is nothing else you can do to change things?  

Why should you leave?

There is clear tension attached to a decision to leave that make leaving a difficult decision.  There are, for example, counter considerations related to your duty as a C&E professional.  What are the personal considerations that weigh in the balance that push toward leaving?   

Personal liability stands out as a singularly compelling reason to depart. Breaking the law can lead to criminal, regulatory and civil liability.  Going to prison or facing years of litigation and civil penalties and possible damage judgements clearly push in the direction of getting out.

Your personal integrity is also a real factor.  Whatever else you do, you must live with your thoughts and consciences as you drift off to sleep.  Is it worth it, feeling that you are living a lie? When you tell friends and family what you do for a living, do you quickly try to change the subject out of shame? 

The potential career impact also needs to be taken into consideration. Who would want to list on their resume having been a “compliance professional” at Enron or Bernie Madoff’s company?  Who would want to hire that person?

There are also professional standards to consider.  It is not unusual for professional certification and licensure accreditation to require a standard of integrity. For example, SCCE’s Code of Professional Ethics for Compliance and Ethics Professionals has very specific and pointed requirements.[2] For lawyers, while they certainly have freedom to represent their clients rigorously, there are ethical limits such as not helping a client to commit a crime or committing a fraud on a court.   

There is also the issue of your health and wellbeing. Stress poses a real risk to health.  You owe it to yourself and those who care about you to take this seriously.  The best result of a conflict with a company is if you can get the company to change its ways.  But if there is no remaining prospect for that, then you have to consider the impact on your health of staying in a corrupt or deceitful environment. 

Decided to leave?  How do you do it?

Consider now that at this point you have decided you cannot stay at this job and you need to leave.  How do you do this?  The critical question, before you execute your departure plan, always needs to be:

Have you done everything you could reasonably have done to change things, and to convince the board/management of the risks and the need to change?  

We assume now that there is no other option.  How do you proceed?

Getting legal advice.  It is wise to seek legal advice before taking any steps.  After you raise objections about the course management insists on taking and then elect to leave, you may be very unpleasantly surprised by how aggressive your employer may be, including using the legal system. You need to be prepared for serious backlash.  Especially if you are leaving in anger, you may need someone to give you wise counsel before doing anything you would regret.

One of the advantages of talking with expert outside counsel is that there may still be ways to stop or change the company that you have not thought of, but that your own legal counsel may suggest. If you have truly exhausted all internal options, then counsel can also work with you to be sure you have created the right record in anticipation of any conflict. There may be employment law issues, and you may be subject to a non-disclosure agreement and/or non-compete. These can raise substantial legal issues.  Counsel may address protections afforded employees under applicable employment law, and laws protecting whistleblowers that may include those who assist employees who speak up which may extend to compliance professionals.  There may also be other protections afforded in the relevant legal system. Counsel can advise you on how you can safely explain to potential new employers or clients why you chose to leave your current employer.

Telling the board. How do you deal with the company’s highest governing authority, the board of directors?  The best circumstance is where the board has documented that you must advise the board when your advice is not followed or when senior people are engaged in misconduct including any instances of retaliation. In this context it is worth considering that “advising the board” could be as simple as an email to the chair of the audit committee.

In developing this article the question about resignation was posted on LinkedIn and resulted in this memorable, personal story from Ross Ronan explaining his experience as a younger compliance professional:

“I was a young Compliance Officer. My first real role. The company was under a   corporate integrity agreement and the new leadership made it clear they didn’t care about compliance.

So I resigned.

I thought I was doing the right thing. Protecting myself. Walking away from a situation that felt wrong.

But when I called my board chairman to explain, he didn’t congratulate me. He said, “Your first obligation was to come to me. If leadership isn’t supporting compliance, that’s something I need to know.”

He was right.

I learned something that day that’s stayed with me for almost 30 years. The Compliance Officer’s job isn’t just to protect the organization. It’s to make sure the right people have the right information to act on.

Walking away is easy. Escalating to the board is harder. But that’s where the real protection happens.

Oversight only works when the board knows what’s going on.”

– Ross Ronan

It may not necessarily be that walking away will be easy.  But there is no question about the need to inform those with the power to take action. 

Having a written record to protect yourself.  Whatever the basis for your decision and however you elect to proceed it is important to document all you have done to fix whatever was wrong at the company, and to fulfill any legal and professional obligations you may have.  This is also essential if the company takes legal action against you. Your legal counsel can advise you on how to do this correctly and legally, so as not to violate any non-disclosure obligations.

Reporting to government? Surprisingly for a profession where we are committed to upholding the law, we may overlook a legal responsibility we may have.  There may be an obligation to report company misconduct or even our own decision to depart. This could be the result of a settlement agreement with the government or involvement in a high-risk, highly-regulated field.  For example, there may be disclosure obligations relating to environmental violations that threaten health and safety. 

You may also consider disclosure to protect the potential victims of corporate misconduct. Consider what happens, for example, if the company is selling a defective product that could cause harm to customers.  Seeing victims harmed because you failed to disclose wrongdoing can be a lifelong stone around your neck.

There is the additional issue of disclosure to the government to receive a financial reward.  This also calls for legal advice on whether and how to proceed. While this may appear inviting, it is typically not a rapid process.  And it would likely be met with an unspoken boycott by companies when you seek new employment.     

Telling your subordinates and trusted colleagues. If you are a CECO you likely have subordinates and colleagues who have trusted you and may even depend on you for their own protection.  Legal counsel might advise you to keep silent about your plans, but you have to deal with the personal and values issues in this process. 

What do you take with you? Before you leave you may decide to take away from the company various items of property – physical such as a computer and intellectual such as your own work product. There may be evidence of the company’s crimes or other misconduct.  You may want the contemporaneous evidence that you spoke up and tried to prevent the violation or misconduct.

Here you need to address any applicable legal protections for company property and proprietary information, versus what you may personally own.  You may be taking information you believe you need to protect yourself. But what if you perceive that there is potential commercial value in the intellectual property you have developed for the company?  What if there are sample forms, insightful memos, or examples of effective communications vehicles you created?

The immediate answer for this is simple and straightforward:  Do not do anything without legal advice. You do not want to walk into a hornets’ nest of allegations from the company, or do anything that is improper or unethical on your way out the door.  

Looking for alternative career opportunities.  The time to think about future career opportunities is NOT when a crisis develops and you need to depart rapidly. Every compliance professional should plan in advance and try always to be prepared. You should develop and  keep industry contacts and have as much of a network as you can.  As my fellow authors and I  reminded people in the book we wrote about entrepreneurs in the compliance field,[3] “Your network is your net worth.” It is likely that people in companies tend to hire people they already know, or at least know of. You want to be in that group if possible.  

Reasons to stay – or wait longer.

Perhaps the clearest message from this article is that nothing about this process is simple. Is it possible that you might still convince some leaders to oppose what is happening in the company – have you really used all the techniques for reaching people? Is it possible that some influential leaders quietly share your concerns and might join with you? Is there a strong business argument that managers have overlooked that supports your objections?  

Have you considered what your departure might do to your subordinates and trusted colleagues?   Are you the only one in position to protect and shield them?  Are they able to leave when you decide to go?

What about inhouse whistleblowers?  When an employee speaks up about misconduct, they are terribly exposed and vulnerable.  There are usually not many who will speak in their defense.  The CECO may be their only protection.

Personal courage and integrity, with the willingness to stand up to misconduct and bravely leave the company in protest, are wonderful and admirable traits.  But what if you really need to maintain your employment?  You may have substantial medical expenses for a family member.  You may still have college debts.  You may have children striving to get through college.  You may need a caregiver for a family member.

There is also a potentially troublesome moral issue. You being in-house may be the only thing preventing serious harm to innocent victims.  If you leave you may carry on your conscience guilt about what happens to those innocents hurt by the corporate misconduct you were resisting.  As a practical matter You may be the last person standing in the way of tremendous harm – to customers, workers, investors and the public.  

Conclusion

I would like to make this easy for you.  It is not.  Yes, there may be times when it is overwhelmingly clear that you do not belong there and need to get out.  But as is spelled out above there is a great deal to consider about making a decision to leave a company. If you hit a time when you must consider leaving an employer, my first rule would be to get advice.  In the field of compliance and ethics there is no reason to face these types of difficult decisions alone.  We have a noble cause we are pursuing, and we should all be there to help one another.  If a time comes when you must make this decision, I hope that this article helps you and leads you to the best possible route.   

[1] In this discussion references to “company or corporate” include all organizations, such as partnerships, universities, and NGOs. Many of the points regarding a CECO could also apply to any C&E professional.

[2] See Murphy & Walker, SCCE’s Code of Ethics for Compliance and Ethics Professionals (2026), https://ideasandanswers.com/scces-code-of-ethics-for-compliance-and-ethics-professionals/

[3] Kristy Grant-Hart, Kirsten Liston & Joseph Murphy, The Compliance Entrepreneur’s Handbook: Tools, Tips, and Tactics to Find Your Killer Idea and Create Success on Your Own Terms 165 (Brentham House Publishing, 2021)  https://www.amazon.com/Compliance-Entrepreneurs-Handbook-Tactics-Success/dp/0993478891