In her October 2021 speech, presaging the Monaco Memo, Deputy Attorney General Lisa Monaco talked at length about the importance of corporate culture. She noted, “Corporate culture matters. A corporate culture that fails to hold individuals accountable or fails to invest in compliance — or worse that thumbs its nose at compliance — leads to bad results. Let me also be clear: a company can fulfill its fiduciary duty to shareholders and maintain a commitment to compliance and lawfulness. Companies serve their shareholders when they proactively place compliance functions and spend resources anticipating problems. They do so both by avoiding regulatory actions in the first place and receiving credit from the government. Conversely, we will ensure the absence of such programs inevitably proves a costly omission for companies who end up the focus of department investigations.” These thoughts were formalized in the Monaco Memo.
What does all this mean for compliance professionals going forward? DOJ officials have emphasized that the changes laid out in the Monaco Memo and the requirements around CCO Certification are to empower compliance professionals. In the Monaco Speech, DAG Monaco stated, “Companies should feel empowered to do the right thing—to invest in compliance and culture and to step up and own up when misconduct occurs. Companies that do so will welcome the announcements today. For those who don’t, however, our Department prosecutors will be empowered, too—to hold accountable those who don’t follow the law.” However you may characterize it, I will channel my inner Glenn Fry (with a nod to Miami Vice) and simply say to CCOs and compliance professionals, “The Heat is On.”
Three Key Takeaway:
- The DOJ will now evaluate corporate culture in an enforcement action.
- You must assess, manage, monitor, and improve your culture.
- Corporate culture is now a key metric for regulators.
