31 Days to a More Effective Compliance Program

A company that does not perform adequate due diligence prior to a merger or acquisition may face both legal and business risks. Perhaps most commonly, inadequate due diligence can allow a course of bribery to continue - with all the attendant harms to a business’s profitability and reputation, as well as potential civil and criminal liability. While most compliance practitioners have been long awa...

One of the areas articulated in the 2019 Guidance was around payments and payroll. For the both the compliance professional and the corporate payroll function, there is a significant role to play in the operationalization of a corporate compliance program. The Evaluation of Corporate Compliance Programs - Guidance Document (2019 Guidance) was replete with references to payment and its critical nat...

The role of the compliance professional and the compliance function in a corporation has steadily grown in stature and prestige over the years. When it came to the corporate compliance function, 2012 FCPA Guidance, under Hallmark Three of the Ten Hallmarks of an Effective Compliance Program, simply noted the government would “consider whether the company devoted adequate staffing and resources to...

The role of the CCO has steadily grown in stature and prestige over the years. In the 2012 FCPA Guidance, under Hallmark Three of the Ten Hallmarks of an Effective Compliance Program, it focused on the whether the CCO held senior management status and had a direct reporting line to the Board; stating: In appraising a compliance program, DOJ and SEC also consider whether a company has assigned resp...

One of the critical elements found in the 2019 Guidance is the need to use the information you obtain, whether through risk assessment, root cause analysis, investigation, hotline report or any other manner to remediate the situation which allowed it to arise. It stated: Evolving Updates – How often has the company updated its risk assessments and reviewed its compliance policies, procedures, and...

Control Testing – Has the company reviewed and audited its compliance program in the area relating to the misconduct? More generally, what testing of controls, collection and analysis of compliance data, and interviews of employees and third-parties does the company undertake? How are the results reported and action items tracked?    Fortunately, the Committee of Sponsoring Organizations of the Tr...

The Evaluation of Corporate Compliance Programs - Guidance Document (2019 Guidance) was very clear about the need for continuous improvement in any compliance program. It stated quite succinctly, “One hallmark of an effective compliance program is its capacity to improve and evolve. The actual implementation of controls in practice will necessarily reveal areas of risk and potential adjustment. A...

There is nothing like an internal whistleblower report about a compliance violation, the finding of such an issue, or (even worse) a subpoena from the DOJ or notice letter from the SEC to trigger the Board of Directors and senior management attention to the compliance function and the company’s compliance program. Such an event can trigger much gnashing of teeth and expressions of outrage followed...

After the internal report comes in and you have properly triaged the matter, you need to scope out and investigate it, promptly, thoroughly and with competent personnel. Your company should have a detailed written procedure for handling any complaint or allegation of bribery or corruption, regardless of the means through which it is communicated. The mechanism could include the internal company ho...

The call, email or tip comes into your office; an employee reports suspicious activity somewhere across the globe. That activity might well turn into a FCPA issue for your company. As the CCO, it will be up to you to begin the process which will determine, in many instances, how the company will respond going forward. This scenario was driven home by the SEC in a 2015 FCPA enforcement action invol...

The building blocks of any compliance program lay the foundations for a best practices compliance program. For instance, in the life cycle management of third parties, most compliance practitioners understand the need for a business justification, questionnaire, due diligence, evaluation and compliance terms and conditions in contracts. However, as many companies mature in their compliance program...

  As every compliance practitioner is well aware, third parties still present the highest risk under the FCPA. The Evaluation of Corporate Compliance Programs - Guidance Document (2019 Guidance) devotes an entire prong to third-party management. It begins with the following: A well-designed compliance program should apply risk-based due diligence to its third-party relationships. Although the degr...

After you complete your risk assessment, you must then translate it into a risk profile. If your estimate of where your bribery risk is greatest is wrong, it will be an effort to address it. As Ben Locwin explained in his  BioProcess International article, entitled “Quality Risk Assessment and Management Strategies for Biopharmaceutical Companies”: Once we have assessed risks and determined a proc...

One cannot really say enough about risk assessments in the context of anti-corruption programs. This is because every corporate compliance program should be based upon a risk assessment, to understand your organization’s business from the commercial perspective, how your organization has identified, assessed, and defined its risk profile and, finally, the degree to which the program devotes approp...

Companies have finally come to realize that institutional justice and fairness are perhaps the most basic tenet of any successful workplace. If employees believe they will be treated fairly, it will engender a level of trust that can work to not simply motivate employees but lead to a more successful workplace and, at the end of the day, a more profitable company. This encompasses the entire lifec...

One of the areas that many companies have not paid as much attention to in their compliance programs is compensation. However, the DOJ and SEC have long made clear that they view monetary structure for compensation, rewarding those employees who do business in compliance with their employer’s compliance program, as one of the ways to reinforce the compliance program and the message of compliance....

One of the key goals of any compliance program is to train employees in awareness and understanding of the FCPA; your specific company compliance program; and to create and foster a culture of compliance. While it seems axiomatic that compliance training is a mainstay of any best practices compliance program, the conversation around training has evolved over the years. The 2012 FCPA Guidance start...

What is the message of compliance inside of a corporation and how it is distributed? In a compliance program, the largest portion of your consumers/customers are your employees. Social media presents some excellent mechanisms to communicate the message of compliance going forward. Many of the applications that we use in our personal communications are free or available at very low cost. Why not ta...

A 360-degree view of compliance is an effort to incorporate your compliance identity into a holistic approach so that compliance is in touch with and visible to your employees at all times. It is about creating a distinctive brand philosophy of compliance which is centered on your consumers. In other words, it helps a compliance practitioner to anticipate all the aspects of your employees needs ar...

What specifically are internal controls in a compliance program? The starting point is the FCPA itself, which requires issuers to devise and maintain a system of internal controls that can reasonably assure: Transactions are executed in accordance with management’s general or specific authorization; Transactions are recorded as necessary (I) to permit preparation of financial statements in conform...

There are numerous reasons to put some serious work into your compliance policies and procedures. They are certainly a first line of defense when the government comes knocking. The Evaluation of Corporate Compliance Programs - Guidance Document (2019 Guidance) made clear that “Any well-designed compliance program entails policies and procedures that give both content and effect to ethical norms an...

What is the value of having a Code of Conduct? In its early days, a Code of Conduct tended to be lawyer-written and lawyer-driven to wave in regulator’s face during an enforcement action as proof of ethical overall behavior. Is such a legalistic code effective? Is a Code of Conduct more than simply your company’s internal law? What should be the goal in the creation of your company’s Code of Condu...

In addition to a company’s senior management, there is a Board of Directors at the top. Yet the role of the Board is different than that of senior management. For the Board of Director, the Evaluation of Corporate Compliance Programs - Guidance Document (2019 Guidance) stated: Oversight – What compliance expertise has been available on the board of directors? Have the board of directors and/or ex...

Mike Volkov, in a blog post entitled “Mood in the Middle Versus Tone at the Top”, said, “Even when a company does all the right things at the senior management level, the real issue is whether or not that culture has embedded itself in middle and lower management. A company’s culture is reflected in the values and beliefs that exist throughout the company.” To fully operationalize your compliance...

Obviously, in every compliance program, the ethical tone of a company and accountability all starts at the top and most specifically senior management. The Evaluation of Corporate Compliance Programs - Guidance Document (2019 Guidance) stated, “The company’s top leaders – the board of directors and executives – set the tone for the rest of the company. Prosecutors should examine the extent to whic...