Over the course of this podcast series, sponsored by Affiliated Monitors, Inc. (AMI), I have visited with Eric Feldman, Senior Vice President of AMI. We have considered the Department of Justice (DOJ) Evaluation of Corporate Compliance Programs, (the “2019 Guidance”), which was released in April 2019. We are exploring what the 2019 Guidance changes are from the Evaluation of Corporate Compliance Program (2017 Guidance), released in February 2017, the structure and emphasis of the 2019 Guidance and what it means for the compliance practitioner going forward. In this concluding Episode, we bring together our final thoughts through a consider of the question “What does it all mean for your compliance practice?”
We began by noting that while the 2019 Guidance was written by prosecutors for their use for companies which are under a Foreign Corrupt Practices Act (FCPA) investigation, Feldman views it as “treasure trove of opportunity” because of that very reason. The 2019 Guidance provides details into “how prosecutors are going to be thinking and perhaps, more importantly, how they are being directed to think about an organization’s ethics and compliance obligations and, finally, whether companies under investigation are going to receive credit for it at the end of the day.”
Additionally, the 2017 Guidance, the first iteration drafted by Hui Chen, is largely incorporated in the 2019 Guidance, was in the form of questions prosecutors would ask about a corporate compliance program. Chen has publicly stated that the 2019 Guidance “really is meant for prosecutors, rather than guidance on best practices for companies”. Feldman disagrees believing the 2019 Guidance is significant “because I think anything that is used by the prosecutors to determine how they are going to charge a company, at the end of the day, is going to be valuable insight into how companies should be structuring their programs.”
Feldman also disagrees that the 2019 Guidance only sets out minimum standards, pointing to the lengthy discussion of culture, literally throughout the “entire document in every aspect of the compliance program”. Feldman has an interesting insight which is the window of opportunity between the “time of the offense and the time of a charging decision,” during which he believes the “DOJ is specifically laying out for the company that when an offense occurs, companies have a lot more power than they may have originally thought to take lemon and turn it into lemonade.” The way to do that is through the remediation of the compliance program and the response to the wrongdoing.
Another key aspect was the use of the word culture throughout, from policies and procedures to ensure culture from conduct; to tone from the very top, starting with the Board of Directors to senior management through down to middle management, all around culture. Moreover, an organization needs to be actually assessing the culture of an organization. The DOJ seems to have embraced culture as a key component of not only a compliance program but also of a company into the values going forward. Feldman takes it a step further as he said he “views culture as more than just some squishy social science concept. It is a foundational internal control that guides the behavior of employees. Without that internal control, all the other rules, regulations, policies and controls you have in place aren’t going to be effective if the culture does not support them.”
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