No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Compliance

New DOJ Guidance: How to Stave Off or Mitigate Future Enforcement

5 Takeaways on the Updates for Corporate Compliance Programs

by Jennifer Jordan and Thomas Suddath, Jr.
June 12, 2020
in Compliance, Featured
illustration of hand holding magnifying glass to review documents

The DOJ has issued revisions to its Guidance on evaluating corporate compliance programs while corporations are responding to unprecedented disruption in their businesses. Reed Smith’s Jennifer Jordan and Thomas Suddath, Jr. discuss what companies can reasonably do now to forestall critical review in future investigations.

Corporations large and small are trying to turn on a dime to react to new workplace and business realities. Many had crisis response teams in place to anticipate turmoil in national events and business threats. When the time comes, looking back on the events of 2020 will provide many businesses with the opportunity to reflect on how well they responded and lessons for the future. But amidst the chaos, what can compliance professionals do now to ensure that their reasonable responses will be favorably scrutinized should the government investigate? With $2 trillion in government spending in response to the pandemic, there are certain to be future federal regulatory, congressional and prosecutorial scrutiny into compliance, as well as a rash of new whistleblower allegations.

On June 1, 2020, the DOJ issued revised Guidance for prosecutors to consider when evaluating a corporate compliance program as a factor informing their prosecutorial discretion and decision-making. There were no seismic shifts in how prosecutors should evaluate compliance programs, but it does offer a window into how companies can prepare now for later scrutiny.

Below are five ways you can use the new Guidance to ameliorate any downstream reviews of your compliance programs during the current environment of precariousness and corporate anxiety.

1. Be Yourself

Like the prior version, the updated Guidance emphasizes the individualized inquiry that all prosecutors should undertake in any investigation. These are not one-size-fits-all undertakings, providing both prosecutors and corporations with needed flexibility to consider and argue not only the circumstances of the conduct, but also the real-world considerations that go into any compliance program.

In its preamble, the revised Guidance notes:

“[w]e make a reasonable, individualized determination in each case that considers various factors including, but not limited to, the company’s size, industry, geographic footprint, regulatory landscape and other factors, both internal and external to the company’s operations, that might impact its compliance program.”

Nevertheless, industry norms do matter. Comparing and evaluating a compliance program against competitors in the industry is an important way of benchmarking an effective program. That might be more difficult right now, as competitors are all facing a mixed bag of issues in the current environment. A company’s physical location, product/service categories and nationwide/international reach will have had a real impact on its business response to the pandemic. Some corporations changed their manufacturing to provide emergency medical supplies and equipment, while others were located in places like New York that were most impacted by the virus. Other international corporations had to react sooner because the pandemic was hitting their operations in Asia or Europe. That said, expect your peers to be re-evaluating their systems and controls to respond to these new challenges, and it helps to pay attention to how the changes in your industry are trending. While it is important to be yourself, the government will have a sense of industry “best practices,” and if your company is under investigation, it does not behoove you to fall below expectations.

2. Document Your Decision-Making and Unique Issues

If there comes a time in the future when you are called upon to defend the compliance decisions or adjustments that were required in the moment, real-time documentation of specifics of how the pandemic was impacting your business will be more meaningful than after-the-fact justifications. Keep your language clear that the decisions being made are directly responsive to the situation.

When making any changes to your compliance program, a question certain to arise is why the change was made and how the company believed that the change would improve the program. Documenting these decisions gives the company solid evidence of its good-faith efforts based on the information and circumstances at the time.

3. Don’t Make Compliance Resource Reductions Permanent

The revisions to the Guidance direct prosecutors to consider the resources devoted to compliance, as well as its effectiveness. So many administrative functions across corporations are shrinking as economic pressures increase; it may be that compliance resources are among those subject to reduction. In highly regulated industries, such as banking and health care, the manner in which the reductions are made should be commensurate with short-term administrative reductions. These business realities may not be avoidable, but corporations do not want to be accused of devaluing the compliance function.

Take, for example, a company that has an extensive outside sales force whose work may be eliminated or curtailed. The compliance function that monitors that sales force may therefore be reduced as result. On the optimistic view that this sales force will be back when safe and effective to return, the compliance function resources dedicated to that segment of the business should likewise return to pre-pandemic levels. Prosecutors will no doubt be looking out for companies taking advantage of emergency responses to take on more risk to improve the bottom line. Having a justifiable reduction in compliance resources now will not be considered a valid excuse for later misconduct that goes undetected. Prioritizing compliance to the same level cannot change, even if compliance resources are proportionally reduced.

4. Follow the Business Today

“Prosecutors should endeavor to understand why the company has chosen to set up the compliance program the way that it has, and why and how the company’s compliance program has evolved over time.” Prosecutors are to look to how the company continually updates its risk assessment. “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?”

When your business emphasis shifts, so should your compliance priorities. Companies rely on their robust compliance programs to avoid or lessen the impact of any investigated misconduct. But building those compliance programs required the company to tailor the programs to the substance and scope of their business, as well as their risk assessments. When those core businesses change to react to the pandemic and any new risks, compliance adjustments may not be prioritized.

Having compliance leaders actively and meaningfully involved in business shifts and pivots will assure companies that the compliance function is informed and able to respond appropriately. Businesses that relied upon employees to be physically present may have shifted to online work arrangements. Likewise, what had been live, in-person compliance training will now have to become virtual. Having compliance involved in those decisions will give the compliance function an opportunity to adjust accordingly without there being an unexplained or unjustified lapse in training.

5. Keep Track of What Is Keeping Employees Up at Night

One of the revisions to the Guidance with respect to policies and procedures is whether a company is tracking the policies employees are turning to. “Have the policies and procedures been published in a searchable format for easy reference? Does the company track access to various policies and procedures to understand what policies are attracting more attention from relevant employees?”

In times of uncertainty, as employees are being asked to stretch their comfort levels with new ways of doing business, an effective compliance program will be easily accessible to employees so they can get the guidance they need to make business decisions in the new environment. If a company can track which policies are getting the most attention, that could raise a flag to business leaders and compliance officers to either revisit those policies or push out emphasized guidance in those areas. When employees may not want to rock the boat by raising their hands to supervisors about an issue, this is one way to ferret out a business risk and head it off before it leads to any misconduct.

As corporations around the world are working to right the ship and pivot in the face of worldwide disruption, the Guidance provides opportunities for prosecutors to consider these circumstances when evaluating a company’s compliance program later in time. Taking affirmative steps now to keep compliance programs current and flexible may provide powerful evidence to counter future scrutiny in the face of alleged misconduct.


Tags: DOJ
Previous Post

DOJ: Evaluation of Corporate Compliance Programs, Updated Guidance – 2020

Next Post

The Capacity to Combat Corruption (CCC) Index 2020

Jennifer Jordan and Thomas Suddath, Jr.

Jennifer Jordan and Thomas Suddath, Jr.

Jennifer Jordan is a member of the Global Regulatory Enforcement group at Reed Smith LLP, where she regularly represents clients in sensitive and high-stakes matters across a range of industries. She has extensive experience representing multinational pharmaceutical and life sciences companies in internal and external legal and compliance investigations and related civil and criminal litigation, including matters relating to misbranding, fraud and abuse, anti-kickback, pricing claims and False Claims Act matters. In addition, she has counseled clients on enhancements to compliance programs. Prior to joining Reed Smith, Jennifer served as an Assistant United States Attorney.
Thomas H. Suddath, Jr. is a former federal prosecutor and a partner in the firm’s Global Regulatory Enforcement group in Philadelphia. He has extensive experience counseling clients in the design, implementation and enhancements of corporate compliance programs in the health care sector and other industries. Tom has defended companies in criminal and civil litigation and investigations, including matters involving the False Claims Act, the Foreign Corrupt Practices Act, the Anti-Kickback Statute and the Sherman Act. He also handles national and international internal investigations on behalf of life science companies and energy and natural resource industries.

Related Posts

PW FCPA Enforcement and Anticorruption 2022 Review_f

FCPA Enforcement & Anti-Corruption Developments

by Corporate Compliance Insights
March 30, 2023

The year that was in FCPA & anti-corruption efforts 2022: A Year in Review FCPA Enforcement & Anti-Corruption Developments What’s...

Fox_DOJ Speeches_f

Analysis of Recent DOJ Statements

by Corporate Compliance Insights
March 23, 2023

DOJ leaders provide insight into agency's plans. Analysis of Recent Statements DOJ Shaping the Future of Corporate Criminal Enforcement What’s...

Fox_2023 ECCP Update_f

2023 Evaluation of Corporate Compliance Programs

by Corporate Compliance Insights
March 23, 2023

Keeping up with 2023 changes to DOJ guidelines. Additions, Deletions & Changes From 2020 2023 Evaluation of Corporate Compliance Programs...

safe harbor

What Is Safe in a World Without Antitrust Safe Harbors?

by Fiona Schaeffer and Adam Di Vincenzo
March 22, 2023

A trio of policy statements dating back to 1993 established the concept of safety zones with regard to information exchanges...

Next Post
The Capacity to Combat Corruption (CCC) Index 2020

The Capacity to Combat Corruption (CCC) Index 2020

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT