31 Days to a More Effective Compliance Program

When is a rose not a rose? When it is a charitable donation not made for philanthropic purposes and violates the FCPA. This was a feature of the Eli Lilly and Company (Lilly) FCPA enforcement action brought by the SEC in 2012, involving a bribery scheme utilized by Lilly in Poland. The scheme and FCPA violations mirrored an earlier FCPA enforcement action, also brought by the SEC as a civil matter...

If one were to reflect upon the providing of gifts and business entertainment to foreign governmental officials, one might reasonably conclude that after 40 years of the FCPA, companies might follow its prescriptions regarding gifts and business entertainment. However, there have been some notable FCPA enforcement actions in this area. The 2020 FCPA Resource Guide clearly stated the FCPA does not...

One of the key changes coming out of the Covid-19 pandemic is the need for dynamism on corporate policies. This message was driven home in a  MIT Sloan Management Review article,“Turbulent Times Demand Dynamic Rules”. The authors believe, “Circumstances can change rapidly in an uncertain world — organizational rules should be designed to change along with them.” This concept is most appropriate in...

More than simply having a Code of Conduct, compliance policies and procedures are required. As former Assistant Attorney General Lanny Breuer articulated, “Your compliance program is a living entity; it should be constantly evolving.” The 2012 FCPA Guidance stated, “When assessing a compliance program, DOJ and SEC will review whether the company’s Guiding Principles of Enforcement have taken steps...

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 2020 Update made clear that “Any well-designed compliance program entails policies and procedures that give both content and effect to ethical norms and that address and aim to reduce risks identified by the company as...

How can you work to operationalize your Code of Conduct as articulated in the DOJ 2023 Evaluation of Corporate Compliance Programs (ECCP)? The 2023 ECCP focuses not on whether a company has a paper compliance program but whether a company is actually doing compliance. A company does compliance by moving it into the functional business units as a part of an overall business process. That is what ma...

What about the training on your finalized Code of Conduct? While there have been criticisms of code training, if you consider training as one source of your 360-degrees of compliance communications, the rollout of a new or updated code can be an opportunity. This rollout fits directly into the concept of 360-degrees of compliance communications as rollout is part of both communications and engagem...

Next comes the evolution of the structure and format of a best practices Code of Conduct. Initially, my experience with this is that they were written by lawyers, largely for lawyers. This included ‘thou shalts’ and ‘thou shalt nots’ liberally sprinkled throughout a lengthy written document. This was what is now referred to as Code 1.0. The compliance community then evolved to Code 2.0, where the...

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 the regulator’s face during an enforcement action as proof of overall ethical 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 creating your company’s Code of Conduct?...

The written standard requirements have long been memorialized in the U.S. Sentencing Guidelines, which contain seven basic compliance elements that can be tailored to fit the needs and financial realities of any given organization. From these seven compliance elements, the DOJ has crafted its minimum best practices compliance program, which is now attached to every DPA and NPA issued. These requir...

Welcome to the September edition of One Month to a More Effective Compliance Program. In this month, we will consider written standards. his month we're going to be taking up written standards so codes of Conduct training on your Codes of Conduct policies and procedures. Then we're going to take a deep dive into some specific policies that you should have in your compliance program. This is really...

As we end this month on the intersection of HR and compliance, I have developed a series of goals and objectives which you might want to use as a starting point for operationalizing your compliance initiatives through your corporate HR function. How are compliance goals cascaded down to individual workers? Does anyone complain that your compliance targets are too complex? How do you deal with repe...

Join Tom Fox in this episode of the 31 Days to a More Effective Compliance Program podcast to delve deeper into the significant role of HR in implementing compliance programs. Hopefully you now understand that many of the traditional functions of Human Resources (HR) can be seen as compliance internal controls. At every touchpoint in the lifecycle of the employment relationship there is a HR touch...

One of the most important focuses of the DOJ’s 2023 ECCP was around culture. This means how far has the culture of compliance been driven down into an organization. The 2019 Guidance posed the following: Culture of Compliance – How often and how does the company measure its culture of compliance? Does the company seek input from all levels of employees to determine whether they perceive senior and...

The DOJ has clarified that middle management is critical to any compliance program’s success. While it does all start at the top, with the Board of Directors and senior executives setting the tone for the rest of the company, prosecutors are mandated, under the 2023 Evaluation of Corporate Compliance Programs (ECCP), to show how middle management, in turn, has reinforced those standards and encour...

Welcome back as we dive into the role of HR in compliance and ethics. Today, we will explore the significant role of HR in operationalizing compliance within organizations. Join us as we uncover practical advice and data-driven insights on how HR can promote ethical behavior and create effective internal controls. According to the Department of Justice, promotions demonstrate a company’s commitmen...

 Today, we're diving into the significance of exit interviews in fully operationalizing a best practices compliance program. Exit interviews provide a valuable opportunity to gather unfiltered insights from departing employees, allowing organizations to enhance motivation, efficiency, and effectiveness. In this blog post, we'll explore the practical benefits of conducting exit interviews and how t...

Employment separation and layoffs can present some unique challenges for the compliance practitioner. Employees can use layoffs to claim that they were retaliated against for a wide variety of complaints, including those for concerns that impact the compliance practitioner. Yet there are several ways that operationalization will help to protect your company as much as possible. The reasons for the...

What should a company do when it desires to hire a CCO? To do so, a company needs to fully understand and appreciate what it needs from such a position going forward. Unfortunately, many companies do not have this insight at the beginning of the recruitment process. The key company stakeholders need to understand the full hiring process. Obviously, this will include HR and others involved in the h...

One of the ways to operationalize compliance and to drive it into the DNA of an organization is through a performance review. Indeed, the 2023 ECCP stated: Incentive System…Have there been specific examples of actions taken (e.g., promotions or awards denied) as a result of compliance and ethics considerations? Who determines the compensation, including bonuses, as well as discipline and promotion...

Another area where Human Resources can help to more fully operationalize compliance is in succession planning. Succession planning is just as important as governance, enterprise risk management and strategic oversight. In other words, it is just as important. Sadly, many companies fail to give it the attention it requires. A PricewaterhouseCoopers (PwC) survey, found nearly one-half of the more th...

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...

In the DOJ’s 2023 ECCP, Incentives and Disciplinary Measures it stated: Incentive System – Has the company considered the implications of its incentives and rewards on compliance? How does the company incentivize compliance and ethical behavior? Have there been specific examples of actions taken (e.g., promotions or awards denied) as a result of compliance and ethics considerations? Who determines...

In this podcast series, host Tom Fox explores the growing emphasis on clawback provisions in compliance programs and employee compensation. The Department of Justice and Securities and Exchange Commission now prioritize holding individuals accountable for misconduct, making clawbacks essential for promoting ethical behavior. These provisions allow organizations to reclaim incentive or bonus funds...

The lack of personal consequences for senior executives responsible for corporate malfeasance is explored in this podcast episode. Executives are incentivized to take excessive risks, knowing they won't have to pay any fines, while shareholders bear the brunt of penalties. Proposed solutions include the concept of "skin in the game," where executives contribute a portion of their compensation to a...