So you think the needle has to point at the north pole?
No, the needle of a compass points which way the traveler has to GO to be traveling north.
At the equator, a compass on the surface of the earth points to the north star. And as one travels north, the star rises in the sky, because the course taken is curved, on the curved surface of a spherical planet. Very simple.
.....That is, unless you have a curiously obtuse agenda, which compels you to say that a compass doesn't work.