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The Role of the Compliance Officer in Advancing Racial Justice

by | Apr 5, 2021

Racial Justice and ComplianceSeattle University School of Law’s Master of Legal Studies in Compliance and Risk Management program spoke with affiliate faculty member David Chen, JD, in a webinar that explained the necessity for compliance professionals to look at their work through a race equity lens. Chen is general counsel and director of legal affairs and compliance at a technology firm in Seattle. 

In today’s environment, said Chen, “it’s extremely important to talk about the issues of racism and to recognize that inaction perpetuates the challenges of structural racism and lack of equity.” “If we don’t actually look at the structures that we think are standardized or potentially colorblind,” said Chen, “we actually are perpetuating the continued challenges of the structural racism at hand.” 

Biden’s Executive Order 13985 Changes the Approach to Compliance 

Chen explained that compliance professionals need to think beyond compliance enforcement business continuity for the sake of avoiding fines and lawsuits. Instead, he says, compliance professionals can help organizations advance a social justice narrative that articulates what it means to be part of a great organization and create good culture.

This approach is especially relevant, said Chen, given the Biden administration’s recent release of Executive Order 13985. The order is a revocation of an order that former President Trump issued at the end of 2020. The Trump administration’s order, Chen explained, “said we weren’t allowed to talk about diversity, and we weren’t allowed to talk about race or other gender issues—which were called lightning-rod issues—in the Federal workplace or in federal contracts.” The idea, said Chen, “was that we could advance race equity by not talking about it anymore.” 

In contrast, Biden’s Executive Order 13985 offers an affirmative approach. The Biden administration recognizes both that racial justice determinants must be measured and that colorblind programs are not, in fact, advancing racial equity.  

Referencing a quote by David Foster Wallace, Chen said the affirmative approach in the BIden executive order “recognizes that individuals are like fish that don’t see water.” In other words, the executive order recognizes that individuals don’t realize they’re in structurally racist environments. This is because the standardizations in the environment were built on structures that engendered racism in the past — or possibly in current times. Those structures, Chen said, can continue to perpetuate disparate impact on individuals who are Black, Indigenous, or people of color. 

Equality versus Equity: A Case Study

Chen presented a case study based on his experience working with the Centers for Medicare & Medicaid Services. The case study involved two facilities: the first with predominantly Black clients, and the second with predominantly white clients. The measured outcomes of each facility were different, said Chen, and this situation illustrated the difference between equality and equity. 

Equality, said Chen, dictates that both facilities should get the same amount of resources and that clients be taken care of in the same way. In contrast, equity, or justice, dictates that if we see certain racial disparities occurring within a system, we recognize that they are structural in nature. Generational trauma and lack of access to housing and capital in the Black community exist due to systemic racial barriers and are apparent in the realm of health care disparities. 

The case study illustrated that “it’s very important as compliance professionals to ask ourselves that really hard question: do we really care about racial justice?” Chen continued: “Do we see disparate impacts within the systems we’re responsible for? We need to have conversations and push the envelope towards being able to make sure those outcomes are fair and equivalent.”

Compliance with a Conscience

Chen spoke in further detail about the concepts of disparate treatment, disparate impact, and how to create frameworks that support viewing compliance work through a racial justice lens. He stressed the need for an expansive and data-driven approach.

“You will often be asked in the compliance profession to look at things in a very narrow window,” Chen said, “because the purpose of compliance in the least holistic sense is to meet the rules and requirements of enforcement.” Seattle U’s “Compliance with a Conscience” approach is about a holistic view. “We’re going to actually work on the decisions as we inform them with data,” said Chen. “Beyond simply complying with the rules and regulations, what is the actual data of our organizations telling us?”  

“The compliance professionals who make a true impact on their organizations are the ones who not only meet the compliance requirements necessary for doing business, but who also add value,” said Chen. “They’re creating a sense of equity, a sense of justice and culture, and a sense of inclusion within the actual outcomes of their business, not just in the narrow sense of compliance.”

Seattle U’s Master of Legal Studies Program

Seattle U’s fully online Master of Legal Studies in Compliance and Risk Management program prepares its graduates to lead compliance efforts in any organization, regardless of industry. Students graduate with a commanding knowledge of law, legal analysis, and the frameworks used to identify, assess, and respond to risk. 

Depending on professional goals and interests, students in the program can optionally choose to focus on financial compliance, healthcare compliance, corporate compliance, or data & cybersecurity compliance. To learn more about the program and our conversation with Chen, hear the full webinar recording.