This week, in a podcast series sponsored by Affiliated Monitors, Inc. (AMI) I have visited with Vincent DiCianni, founder and President of AMI, and Eric Feldman, Senior Vice President of AMI. We have been reviewing the Department of Justice (DOJ) announcements over the past year and back to the FCPA Corporate Enforcement Policy, announced in November 2017, to consider what strategies companies can use based upon these documents. Over the series we have explored what companies can do both internally and externally to incorporate the Benczkowski Memo (the “Memo”) and other DOJ guidance into their corporate compliance programs. In our concluding episode, we discuss proactive monitoring, which demonstrates the benefits of using a third party to fulfill the compliance mandates that have been laid out by the DOJ
DiCianni began by noting that January 2019 is the 15thanniversary of the founding of AMI. This makes AMI one of the oldest organizations around which has focused its business model on independent integrity monitoring. This has given the organization and its members a unique opportunity to observe and be a part of the process of the development of the third-party independent integrity monitor.
Proactive monitoring is directly in the wheelhouse for every compliance program’s three key prongs: prevent, detect and remediate. It is interesting to note that Deputy Attorney General Rod Rosenstein said a keynote address, in late November 2018, that money spent on an effective compliance program is “money well spent” while the lack of such an investment is a “missed opportunity.” DiCianni echoed this sentiment by stating, “when you think about it, that sort of speaks volumes to what this new guidance is all about. It is for companies to take a serious look at their own compliance programs”. If your organization does not have the capability to do an honest and deep program assessment you should consider “bringing in an outside third-party professional, a compliance company that is independent and neutral and does not have sort of the biases, to perform an internal review to look at a compliance program. The Idea is to bring in an outside entity with knowledge and experience to look at a program. If I could sort of put it into sort of a nutshell is it’s proactive monitoring to avoid an imposed monitor.”
The Memo and other DOJ announcements in 2018 lay out a discrete roadmap for how organizations can avoid the imposition of a monitor. The independent monitor is conflict free, performs a comprehensive assessment and then helps lead the company through the recommended remediations. My daughter continually reminds me to “keep it real” and that is the basis for independent third-party monitoring or assessments. DiCianni put it another way in stating, “the proactive monitor is focusing the company on whatever deficiencies might exist within their program. It might be fixing the root cause problems by implementing controls and processes. Equally importantly, the independent monitor does this over time. It can look at a company’s efforts to implement those changes and then maintain them. This is validating the efforts that the company is making to fulfill a compliance mandate. I think that is one of the strengths of a good monitor; taking what all of the things that the company’s doing and saying, you know, that’s real.”
The proactive monitor does not come into an assignment with preconceived notions. There are no judgements or biases, it is truly is a blank slate. DiCianni went on to say, “I use the words objective and professional. Those are the great strengths of an independent third-party coming in without preconceived or pre-ordained conclusions. This leads to an honest and fair assessment for the company.” So the upside of bringing in an independent is expertise, professionalism, experience and efficiency.
This final point is very much a business positive as the company itself does not have to recreate the wheel to assess itself as the tools are already created. An outside independent third-party allows the company to continue its business while “the independent third-party monitor is on the outside, basically looking in on the company while it continues its operations.” This can a distraction if a company does so internally. DiCianni stated, “That’s why I think one of the benefits of an external is just that, it allows the company to do its work and the expert does the assessment. Finally, the expertise of the independent can reveal problems the companies may never have been aware of.”
To conclude, I asked DiCianni to articulate the differences between a proactive monitor and one imposed by regulators as a part of an agreed settlement. He explained that a proactive monitor comes to a company not necessarily when they are in trouble or when there is something going on but when the company desires to assess their compliance program. Obviously, this can be an effective tool. Conversely, an imposed monitor brings a different perspective because they are imposed and their mandate is not necessarily to look at all aspects of a compliance program. Usually, their mandate might be an agreed to or specific issue to consider.
So, while the Memo may well portend less imposed monitors, the costs for putting your organization in a position where one is mandated by the government can be quite high. Not only is the better approach to compliance a proactive approach, it is by far the more cost-effective approach. Finally, the Memo and other DOJ pronouncements in 2018 not only further articulates the road map of what the DOJ expects but also how a company can move through the enforcement process to receive a full declination under the FCPA Corporate Enforcement Program.
For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors, Inc. at www.affiliatedmonitors.com.