(34) In an effort to standardize this practice, the Department of Justice (DOJ) articulated a set of principles for federal prosecutions, known after its author as the "Holder Memorandum." (35) The Holder Memorandum commits prosecutors to weigh, along with other factors such as voluntary disclosure and willing cooperation, "[t]he existence and adequacy of the corporation's compliance program." (36) Unlike the Guidelines, however, the Holder Memorandum did not attempt to specify the elements of
effective compliance. (37) Instead, the Holder Memorandum preserved prosecutors' discretion to determine whether a program was well designed and effective.
An
effective compliance strategy can also distinguish a company from its competitors.
Because of this, companies in regulated industries should consider automating their processes with a "compliance system of record." Even if the company is following a pre-existing or company-created checklist, the seven elements of
effective compliance and ethics programs, stemming from the Federal Sentencing Guidelines, should be closely examined:
"Having an
effective compliance program isn't going to prevent you from doing things that aren't compliant, but it's going to allow you to find them and deal with them before they become big problems," says attorney Alan Schabes of Benesch, Friedlander, Coplan & Aronoff LLP.
In particular, these amendments affect the requirements for establishing an "
effective compliance program"--a means of mitigating institutional punishment in the wake of criminal conduct.
We've teamed up with Lynn Collier , solutions director of Hitachi Data Systems, who has four tips for
effective compliance to ensure you don't get fined:
One useful approach for assessing the compliance and ethics elements of corporate governance is to use the seven steps of an
effective compliance and ethics program contained in the Federal Sentencing Guidelines for Organizations (FSGO).
It proposes to modernize the regulatory system for foods and therapeutic products by strengthening the oversight of the benefits and risks of therapeutic products throughout their life cycle, to support
effective compliance and enforcement actions, and to enable a greater transparency and openness of the regulatory system.
We want to encourage federal regulators to provide
effective compliance assistance, rather than go straight to the penalty stage.
Organizations that have
effective compliance and ethics
The second habit of
effective compliance is the establishment of appropriate oversight for compliance.
"The steps outlined in the report are highly positive and now the emphasis must be on ensuring
effective compliance and implementation across all of the 25 member states."
