Saibal
Evaluation of Corporate Compliance Programs
Saibal Mukherjee 20 May 2019

Evaluation of Corporate Compliance Programs

The DOJ’s Guidance document dated April 2019 on “The Evaluation of Corporate Compliance Programs,” is a contextual analysis of the ‘comprehensiveness’ of an effective corporate compliance program. Even though such Compliance Programs are appraised individually there are common parameters.

The Guidance emphasize “the comprehensiveness of the Compliance Program ensuring that there is not only a clear message that misconduct is not tolerated, but also policies and procedures — from appropriate assignments of responsibility, to training programs, to systems of incentives and discipline — that ensure the compliance program is well-integrated into the company’s operations and workforce.” As per the Guidance, there are three ‘fundamental questions that prosecutors ask while assessing Compliance Programs:

· Is the Program well-designed?

· Is the Program effectively implemented?

· Does the Compliance Program actually work in practice?

Part I of the Guidance delves into aspects of well-designed Compliance Program and covers

1. Risk assessment,

2. Policies and procedures,

3. Training and communications,

4. Confidential reporting structure and investigation process,

5. Third-party management, and

6. Mergers and acquisitions.

Part II of the Guidance looks into the corporate implementation strategy as follows:

1. Commitment by senior and middle management,

2. Autonomy and resources, and

3. Incentives and disciplinary measures.

Part III of the Guidance deliberates on whether a Corporate Compliance Program is working effectively in practice:

1. Continuous Improvement, Periodic Testing, and Review

2. Investigation of Misconduct

3. Analysis and Remediation of Any Underlying Misconduct

The Guidance mention that prosecutors need to consider whether Corporate Programs have evolved over time to address existing and changing compliance risks. Among other factors, it will be reviewed “whether the corporation has made significant investments in, and improvements to, its corporate compliance program and internal controls systems.”

Will this change the way corporates are currently addressing their Compliance Programs? Will Corporates start making increased investments in Compliance programs?

Access the full script of DOJ’s “Evaluation of Corporate Compliance Programs” -

https://www.justice.gov/criminal-fraud/page/file/937501/download
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