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 external auditors held executive or private sessions with the compliance and control functions? What types of information have the board of directors and senior management examined in their exercise of oversight in the area in which the misconduct occurred?
The DOJ Antitrust Division’s Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (Antitrust Compliance Program Guidance) was even more explicit in announcing their expectation for robust Board oversight of a corporate compliance function. The Antitrust Compliance Program Guidance stated “For the antitrust compliance program to be effective, those with operational responsibility for the program must have sufficient autonomy, authority, and seniority within the company’s governance structure, as well as adequate resources for training, monitoring, auditing and periodic evaluation of the program. The Antitrust Compliance Program Guidance then went on to ask the following questions: Who has overall responsibility for the antitrust compliance program? Is there a chief compliance officer or executive within the company responsible for antitrust compliance? If so, to whom does the individual report, e.g., the Board of Directors, audit committee, or other governing body? How often does the compliance officer or executive meet with the Board, audit committee, or other governing body? How does the company ensure the independence of its compliance personnel?
Three key takeaways:
- The DOJ Evaluation requires active Board of Director engagement and oversight around compliance.
- Board communication on compliance is a two-way street; both inbound and outbound.
- Does the Board of Directors have a Compliance Expert?