A tailored corporate compliance and ethics program which is actually implemented can prevent and reduce risks in several ways as well as promote a culture of compliance. If the compliance program is effectively prepared and implemented, it should provide management with timely information about potential legal problems and a procedure to promptly deal with problems. If a company is investigated for a potential violation of law, having a well-tailored compliance program in place may significantly reduce any penalty imposed and in some cases avoid the imposition of a penalty at all. In addition, the existence and implementation of a compliance program may reduce or avoid civil liability in some situations.
The compliance program needs to fit the company – “one-size-fits-all” plans are typically not as effective, or effective at all, in preventing or reducing risks. However, effective compliance programs will likely have similar core structures which are derived from the “Organizational Sentencing Guidelines,” which is a set of advisory sentencing benchmarks developed by the U.S. Sentencing Commission. These guidelines set forth seven elements necessary for an effective compliance plan:
All plans must be periodically reassessed and modified to be kept current.
Areas of Review
Set out below are areas which a company may wish to monitor and provide programs or procedures or develop new ones to minimize risks.