One of the ongoing questions faced by compliance practitioners is how to measure the effectiveness of your company’s Foreign Corrupt Practices Act (FCPA) compliance program. In an article in the December 2011 issue of the SCCE Magazine, entitled, “How does your compliance program measure up?” author Danielle Herrick explores this question. She concludes that the best manner “to measure colleague knowledge and adherence to policies and procedures is through the development of a comprehensive compliance monitoring program.” Herrick sets out a six point plan which not only contain clear metrics but can also be “used to foster continuous improvement” in your company’s compliance program.

  1. Agreed upon scope and strategy. This is more than simply buy-in from management. There are several approaches which you can take and consistency in your approach is a key to obtaining measurable results.
  2. Core program. Herrick believes that the broadest range of policies and procedures which apply to all employees across the globe should be the foundation of your company’s monitoring program. This should include your Code of Conduct and the policies and procedures of your compliance program.
  3. Standard tools and templates. These are important not only to achieve consistency but also due to the upfront cost of development. If you can develop and utilize the same measuring tools and reporting templates this will decrease costs and increase efficiencies over monitoring cycles.
  4. Reporting. Herrick states that “By assigning numeric results to key performance indicators, you can easily manage the effectiveness of your compliance program.” This will also allow you to better track progress over times as well.
  5. Training and communication. This allows the compliance practitioner to engage in further compliance training when performing compliance monitoring. This is a useful tool where computer based compliance training is the norm as it allows the compliance officer to have another opportunity to interact on a more direct level with company employees.
  6. Continuous improvement. Ongoing monitoring provides not only the opportunity but sets the basis for ongoing enhancement to your company’s compliance program. You can utilize the results to effect improvement on a broad based focus or at a more granular level.

Herrick’s approach is a good starting point for any compliance practitioner to design an ongoing monitoring program. As your company’s compliance program matures, further and greater refinement will be not necessary but also more difficult. Management will expect performance measurements of a compliance program, as it would from any other program. I recommend her article to as valuable guide.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2012

1 comments
KPI Software
KPI Software

I agree that standard tools and templates are very important part of a successful compliance programme, and as stated; they can be and can be very expensive to develop and maintain. I would recommend (particularly for large organisations with multiple locations) an online KPI tool that provides a simple and intuitive way to gather this KPI information, but also allows for performance statistics and reporting.