FCPA Guidance Takeaways for the Chief Compliance Officer

By Donna Boehme, for Corporate Counsel on www.law.com

(November 19) — Corporate compliance officers who were eagerly awaiting the joint release of this week’s “A Resource Guide to the U.S. Foreign Corrupt Practices Act” from the U.S. Department of Justice and the Securities and Exchange Commission should not be disappointed. Although the guidance breaks little new ground, CCOs with robust compliance programs will likely find their companies’ efforts validated by its 120 pages of detailed clarifications and discussion of numerous hypothetical situations. The document should also aid CCOs in educating their boards and senior management on the difference between a meaningful, well-implemented, well-resourced program and mere window-dressing.

But what’s particularly useful for CCOs is the continuation of strong messaging on the need for CCO independence, empowerment, and resources. In its description of the “hallmarks” of effective compliance programs, the guide tracks the language of the 2010 OECD Good Practice Guidance on Internal Controls, Ethics, and Compliance, which noted that the CCO must have “adequate autonomy from management” in order to do the job. Justice has been using this language in individual FCPA settlement agreements since 2010, going beyond the letter of the current Federal Sentencing Guidelines for Organizations.

The guidance also echoes recent public remarks from senior SEC officials warning boards and management that their support for the CCO role is now under the microscope. In an October address to a Society of Corporate Compliance and Ethics gathering of more than 1,000 compliance professionals, Stephen Cohen, associate director of the SEC Division of Enforcement, stated that “it sends a strong message that compliance and ethics are important if a company includes an independent CECO in the C-suite” and encouraged boards to provide CCOs with “the necessary resources, independence, standing, and authority to be effective.”

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