Continuous monitoring and improvement are two of the most important phrases for any compliance program. These twin concepts were perhaps the biggest modifications in the 2020 Update to the Evaluation of Corporate Compliance Programs. In 2021 and 2022, all companies’ risks changed as we moved from Working From Home to Return To Office and now a hybrid work model. Of course the great resignation has also played a part.These changes in our basic work location drove home perhaps the most prescient comment I heard during the pandemic, which was by Jed Gardner, who said, “We have moved from disaster recovery to business continuity to business as usual.” This means that risks will change in ways you may not see at speeds you do not anticipate. Your compliance program must be ready to respond to whatever those risks might be going forward.
In the 2020 Update, the DOJ began to address this from the compliance program perspective with several questions. “Is the risk assessment current and subject to periodic review? Is the periodic review limited to a “snapshot” in time or based upon continuous access to operational data and information across functions? Has the periodic review led to updates in policies, procedures, and controls? Do these updates account for risks discovered through misconduct or other problems with the compliance program?”
The next area for continuous monitoring and improvement was an area of compliance that is not normally associated with those concepts, Policies, and Procedures. Here questions included “When was the last time your policies and procedures were updated? Perhaps more importantly, under the 2020 Update, what was your process for doing so? Was there any rigor around your process? Did that rigor include incorporating information and data collected through continuous monitoring, real-time monitoring, or continuous access to operational data and information across functions?”
The final area in the 2020 Update for consideration is called Continuous Improvement, Periodic Testing, and Review. The question included the following, “How often has the company updated its risk assessments and reviewed its compliance policies, procedures, and practices? Has the company undertaken a gap analysis to determine if particular risk areas are not sufficiently addressed in its policies, controls, or training? What steps has the company taken to determine whether policies/procedures/practices make sense for particular business segments/subsidiaries? Does the company review and adapt its compliance program based on lessons learned from its misconduct and/or other companies facing similar risks?”
Three key takeaways:
1. How has your company’s risks changed over the past year?
2. What is your process for continuous monitoring and improvement?
3. What sources of information do you use that come from outside your organization?
