31 Days to a More Effective Compliance Program

In this podcast episode, Tom Fox highlights the importance of incorporating compensation systems into a company's compliance program. He discusses how the DOJ and SEC view monetary structures as a way to reinforce compliance and reward employees who adhere to compliance programs. Fox advises compliance practitioners to revise incentive systems to align with the goals of the compliance program, ens...

In these podcast episodes, Tom discusses the importance of incorporating incentives and support systems into a company's compliance program. He presents six core principles for effective compliance incentives, emphasizing the need for simplicity, visibility, and institutional mechanisms to ensure their longevity. Fox also highlights the role of human resources in implementing compliance programs a...

Welcome to the August edition of One Month to a More Effective Compliance Program. In the month of August, 2023 we will consider the role of Human Resources in a best practices compliance program. In this episode, Tom Fox explores the role of HR in implementing effective compliance programs within companies. The episode focuses on the importance of incentivizing compliance and ethical behavior thr...

As far back as 2004, in Opinion Release 04-02, the DOJ realized this was an important part of an overall compliance program when it approved a proposed compliance program that had the following requirement, "Clearly articulated procedures which ensure that discretionary authority is not delegated to persons who the company knows have a propensity to engage in illegal or improper activities." One t...

One of the conventional wisdoms about compliance training is that you will never be able to reach 5% of your workforce with compliance training because they are predisposed to lie, cheat and steal anyway. Whether they are simply sociopaths, scumbags or just bad people; it really does not matter. No amount of training is going to convince them to follow the rules, as they do not think such laws app...

The 2023 Evaluation of Corporate Compliance Programs, (ECCP), made clear that operationalization of compliance into an organization should be done at multiple levels. The ECCP also called out culture as a key indicia for an ethical culture. Creating an ethical culture is an important step for any company to burn compliance into the DNA of a business. It must be done at every level of an organizati...

I have long advocated for a greater role of Human Resources (HR) in compliance. Indeed, one sign of a mature compliance and ethics program is the extent to which a company’s HR Department is involved in implementing a compliance solution. While many practitioners do not immediately consider HR as a key component of a best practices compliance solution, it can be one of the lynch pins in spreading...

The concept of privilege in an internal investigation is critical. Two important privileges are the attorney-client privilege and the work product privilege. Unfortunately, both are often misunderstood, miss-applied and consequently lost. To determine whether you have a valid privilege claim, it is incumbent to understand the parameters of the attorney-client privilege. In presentation, entitled “...

Must an investigator warn an employee that concealing information from company lawyers conducting an internal FCPA investigation could be a federal crime? Even if the company attorneys provided the now standard corporate attorney Upjohn warning? Does a company attorney asking questions morph into a de facto federal agent during an internal company investigation regarding alleged FCPA violations an...

In their article, “Successful Board Investigations”, David Bayless and Tammy Albarrán, offered seven considerations to facilitate a successful Board investigation.  Consider whether you need independent outside counsel.  Consider hiring an experienced investigator to lead the internal investigation.  Consider the need to retain outside experts.  Analyze potential conflicts of interest at the outse...

Many companies have an investigation protocol in place when a potential compliance violation or other legal issue arises. However, many Boards of Directors do not have the same rigor when it comes to an investigation, which should be conducted or led by the Board itself. The consequences of this lack of foresight can be problematic, because if a Board does handle an investigation right, the conseq...

There is nothing like an internal whistleblower report about a FCPA violation, the finding of such an issue or (even worse) a subpoena from the DOJ 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 immediately by proclamations “We are...

In an article, entitled “Internal Investigations, How to Conduct an Anti-Corruption Investigation: Developing and Implementing the Investigation Plan”, Mara Senn, now Director & Senior Counsel, Global Compliance Investigations at Zimmer Biomet and Michelle K. Albert, former lawyer at Arnold & Porter discussed cross-border investigations. They considered the following issues. Offer interview transl...

What are the characteristics of a good interview in the context of an internal investigation? Is there one technique you can use which will provide you the results you want to achieve? How should you think through your questions and document review prior to the investigation? At this point in time, how do such issues play out in the time of Coronavirus? There is no one right way to prepare for and...

What are some of the top challenges you may well face during an investigation? Beyond the basics, a company must consider the intake process as a starting point, which Jonathan Marks noted is one of the biggest challenges. Rather surprisingly, he noted there are still companies without a hotline or anonymous reporting system, stating “we still see organizations whereby there is no formal ethics ho...

Since 2015, DOJ has put even more pressure on every CCO, compliance practitioner, and indeed company, to get an investigation done quickly, efficiently, and, most importantly, right. This is even more true after the U.S. Supreme Court’s decisions in Digital Realty Trust v. Somers, which limited whistleblower protection and benefits to only those whistleblowers who go to the SEC, rather than initia...

Dan Dunne, in a Compliance and Ethics Professional article, entitled “Foxes and henhouses: The importance of independent counsel”, discussed what he termed a “critical element” in any investigation, which he denominated as “fair and objective evaluation.” Dunne wrote that a key component of this fair and objective evaluation is the Who question: who should supervise the investigation and who shoul...

Under Part 1, Section D. Confidential Reporting Structure and Investigation Process stated in part, Properly Scoped Investigation by Qualified Personnel –What steps does the company take to ensure investigations are independent, objective, appropriately conducted, and properly documented? How does the company determine who should conduct research, and who makes that determination? These questions...

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. In the 2020 Update, provided these series of questions about your internal investigations:  Properly Scoped Investigations by Qualified Personnel – How does the company determine which complaints or red flags merit further invest...

One of the things that I learned from the television series M*A*S*H was the need for triage. In the hospital setting, triage is the process of determining the priority of patients’ treatments based on the severity of their condition. In the 2012 FCPA Guidance, there is a short but succinct statement, “once an allegation is made, companies should have in place an efficient, reliable, and properly f...

In Houston, we have experienced energy companies laying off upwards of 30% of their workforce, both in the US and abroad. Employment separations can be one of the trickiest maneuvers to manage in the spectrum of the employment relationship. Even when an employee is aware layoffs are coming it can still be quite a shock when Human Resources (HR) shows up at their door and says, “Come with me.” Howe...

What are some best practices regarding an internal reporting system? The 2012 FCPA Guidance stated, “An effective compliance program should include a mechanism for an organization’s employees and others to report suspected or actual misconduct or violations of the company’s policies on a confidential basis and without fear of retaliation.” This was expanded in the DOJ’s 2020 Guidance, in the secti...

What are some best practices regarding an internal reporting system? The 2012 FCPA Guidance stated, “An effective compliance program should include a mechanism for an organization’s employees and others to report suspected or actual misconduct or violations of the company’s policies on a confidential basis and without fear of retaliation.” The 2019 Guidance further refined this basic requirement f...

Is your hotline working for you? In an article, entitled, Promoting Effective Use of the Company Compliance Hotline, José Tabuena provided an excellent example of the power of a hotline. He provided a case study of a company which had not integrated its IT function into its regular compliance and ethics training programs. As such there were zero calls into the hotline by IT employees. This dynamic...

While it is clear that the government expects companies to have an internal reporting system, there are benefits far beyond putting you in the government’s good graces. Companies with a more robust internal reporting system generated more reports. Dr. Welch found a group of companies he termed “power users”, which were high level users of whistleblower reporting systems who had more activity than...