An “exploding” field

Steve Naughton, director of the Center for Compliance Studies, trains students to help keep corporations honest

Steve Naughton knows that at first blush, compliance may not seem like the most scintillating field.

“Nothing says excitement like a group of compliance officers getting together,” he says, remembering a joke he heard at a conference: “We now know what all of the school crossing guards grew up to be.”

For the record, Naughton, director of the Center for Compliance Studies at Loyola University Chicago School of Law, was never a crossing guard. But he considers himself a problem solver—which, he notes, aligns with former U.S. Secretary of State Colin Powell’s definition of leadership: “solving problems.”

The problems that compliance professionals tackle aren’t conceptual, theoretical, or even financial—they’re profoundly human.

People need direction, and compliance is the discipline that provides it: What are the expectations for behavior in a company? What happens if there’s wrongdoing? How should you make sure you handle it in a way that’s fair to everybody involved, and what’s the resolution?

“To me, it’s a very practical thing,” says Naughton, who has helped pioneer corporate compliance over the course of his career.

The growth of compliance is mirrored by increasing transparency in corporate culture overall. Naughton has had a front-row seat for this transformation.

After law school at Notre Dame, he got his start at Chicago firm Rooks, Pitts & Poust before moving to Pope, Ballard, Shepard & Fowle. He was elected as a partner there, just before it closed after 98 years in business. He pivoted to an in-house role at the Quaker Oats Company, which was later bought by PepsiCo. There, he built the compliance department from the ground up, a domain previously covered, he says, “in a disparate, uncoordinated way” by other units such as HR and security.

Since then, the field of compliance has “exploded,” he says. In 2003, the national Compliance Week convention drew just 40 people. By 2019, 2,400 were in attendance.

The compliance space is now expanding to include specialties like ESG (environmental, social, and governance), which deals with sustainability. That’s a charge led by millennials who want companies to stand for more than just profits, says Naughton.

In fact, the growth of compliance is mirrored by increasing transparency in corporate culture overall. Naughton has had a front-row seat for this transformation.

After leaving PepsiCo, he served as Kimberly-Clark’s first-ever chief ethics and compliance officer. Then he became a member of a team that assisted Volkswagen with compliance efforts after its 2015 emissions scandal.

At the Center for Compliance Studies at Loyola University Chicago School of Law, Naughton helps shape the next generation of leaders in the field. His corporate compliance course covers the crises at Volkswagen, Wells Fargo, and the U.S. Olympic Committee/USA gymnastics. He co-teaches a class on environmental, social and governance with two other professors. And he works directly with thesis students who are pursing master’s degrees.

Naughton thinks the Chicagoland area, and Loyola in particular, is an ideal place to study compliance. Local firms investigate and litigate high-profile cases involving locally based organizations like McDonald’s and the Chicago Blackhawks. Graduates of the School of Law are leaders, not “technocrats,” he says.

“They look at things from a holistic point of view,” Naughton says. “They’re dedicated to the proposition that they’re going to make a difference—and they do.” —Audrey Michelle Mast (April 2022)