Commentary: Not All Companies' Compliance Programs Are Created Equal

Summary

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In its revised Principles of Federal Prosecutions of Business Organizations, set forth in the Criminal Resource Manual, the Department of Justice outlined the factors that federal prosecutors will consider in determining whether to charge corporations with criminal wrongdoing after suspect conduct is discovered (see Part 1 of this series, The Daily Record, Friday, Nov. 17).

It made clear that the "existence and adequacy of [a] corporation's compliance program" is an important part of that determination. Likewise, before bringing charges against a corporation, other government offices and authorities charged with overseeing highly regulated industries will evaluate any good-faith effort that a company has made to comply with applicable statutes and regulations through "an effective compliance program."

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Extract

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Commentary: Not All Companies' Compliance Programs Are Created Equal

A compliance program, however, will be valuable only if it is properly conceived, structured and applied. If not, the existence of such a program may actually cause the corporation harm. The purpose of such a program must therefore be well understood, its details must be thoughtfully crafted and it must be carefully monitored once it is implemented.

One purpose of an appropriate compliance program is succinctly describe...

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