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, the 2020 FCPA Resource Guide, under the Hallmarks of an Effective Compliance Program, noted the government would “consider whether the company devoted adequate staffing and resources to the compliance program given the size, structure, and risk profile of the business.” The Monaco Memo and 2023 changes to the Corporate Enforcement Policy have made this all the more critical going forward.
This Hallmark was significantly expanded in the FCPA Corporate Enforcement Policy and 2020 Update. In the FCPA Corporate Enforcement Policy, the DOJ listed the following as factors relating to a corporate compliance function that it would consider as indicia of an effective compliance and ethics program: 1) the resources the company has dedicated to compliance; 2) the quality and experience of the personnel involved in compliance, such that they can understand and identify the transactions and activities that pose a potential risk; 3) the authority and independence of the compliance function and the availability of compliance expertise to the board; 4) the compensation and promotion of the personnel involved in compliance, in view of their role, responsibilities, performance, and other appropriate factors; and 5) the reporting structure of any compliance personnel employed or contracted by the company.
The 2020 Update, Monaco Memo, and 2023 update to the Corporate Enforcement Policy all demonstrate the continued evolution in the thinking of the DOJ around the corporate compliance function. Their articulated inquiries can only strengthen a corporate compliance function specifically; and the compliance profession more generally. The more the DOJ talks about the independence of the compliance function, coupled with resources being made available and authority concomitant with the corporate compliance function, the more corporations will see it is directly in their interest to provide the resources, authority, and gravitas to compliance position in their organizations.
Three key takeaways:
- How is compliance treated in the budget process?
- Has your compliance function had any decisions overridden by senior management?
- Beware of compliance outsourcing, as any such contractor must have access to company documents and personnel.
