Companies must test compliance regimens against DOJ guidance

Posted by Charles Middleton on 06/23/2017

Q: What are corporate compliance programs, and why do companies need them?

A: Corporate compliance programs are used by companies to meet and follow the standards set by government laws and regulations. Issues often arise as to the assessment of a company's compliance program and, when the company cooperates with an investigation, as to what constitutes substantial assistance. Often during an investigation, a company's compliance is evaluated by investigators. Recently, the U.S. Department of Justice's Fraud Section issued guidelines for this evaluation. Companies now can refer to this additional guidance in developing and implementing effective corporate compliance programs. This update should be welcomed by companies as it establishes guideposts and provides some direction. Although the guidance is nonbinding, the bullet-point format lends itself to use by lawyers and compliance officers as a list of areas that need to be specifically addressed when creating, implementing and reviewing compliance programs.

Q: Of what do the new guidelines consist?

A: The recent DOJ memorandum provides insight into some of the common questions that investigators and prosecutors may ask in determining if a company was compliant with a given rule or regulation. Specifically, the new DOJ guidance is organized into 11 topics and 119 follow-up sample questions. The majority of topics put the focus on a new area — proactive corporate compliance. Eight of the 11 topics have at least some focus on how a company must do more than just create a corporate compliance program; instead, the company must implement it properly and be proactive in its continuous evaluation.

Q: What does this mean for businesses and corporate entities?

A: Although some of the guidance may be familiar territory for companies, the substantive points are helpful to lawyers and compliance officers as a list of areas that need to be specifically addressed when creating, implementing and reviewing compliance programs. After implementing a proper compliance program, companies that are serious about compliance must test their compliance regimens against the DOJ's guidance. This will ensure that if and when a company faces an investigation, it has strong and coherent answers that correspond to the DOJ factors. Hopefully, most companies will find that they already fare well in comparison to the guidance. If not, the new DOJ guidance will provide a useful road map for companies to review and, in some cases, rework their compliance programs.

PAULA BURKES, BUSINESS WRITER

Published The Oklahoman, June 22, 2017