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DOJ Issues New and More Robust Guidance on Evaluation of Corporate Compliance Programs (Part I of V)

The Volkov Law Group has scheduled a free webinar on DOJ’s New Compliance Program Guidance for May 9, 2019, at 12 noon EST. Sign up HERE.

In a major development in ethics and compliance program expectations, the Justice Department has issued a new and important revised guidance on the Evaluation of Corporate Compliance Programs (HERE).  The new Evaluation Guidance supersedes the prior document issued in February 2017, which contained a lengthy list of questions on key topic areas.

The headline from this new Evaluation Guidance is significant —  the Justice Department has advanced the ball with respect to ethics and compliance or raised the bar yet again (whatever analogy fits the bill) for corporate compliance programs.  The Evaluation Guidance is a major document that brings together many significant trends in the compliance area and places the DOJ stamp on these trends.  For the compliance officer, this is a new and important document that should be communicated throughout their respective organizations, starting with the board and senior management.

The new Evaluation Guidance was issued the same day as Brian Benczkowski delivered a speech on the topic at the recent Ethics Compliance initiative meeting in Dallas, Texas (here for copy of speech).  As noted by Brian,

“[T]here are three fundamental questions a prosecutor should ask in evaluating a company’s compliance program:

First, is the program well-designed?

Second, is the program effectively implemented?

And, third, does the compliance program actually work in practice?”

Benczkowski explained, the updated Evaluation Guidance “uses these questions as a framework to categorize the topics that the Department has frequently found relevant in evaluating a corporate compliance program, and also provides guidance from other Department and enforcement documents.”

Benckowski concluded, “[C]ompliance is a fast-moving field, and one in which evolving technologies and globalization of economies and enforcement can provide both challenges and solutions.”

The Evaluation Guidance is broken down within the three questions noted above with some overlapping discussions.  In general, the topics include:

  • Risk Assessment
  • Policies and Procedures
  • Training and Communications
  • Confidential Reporting Structure and Investigation Process
  • Third-Party Management
  • Mergers and Acquisitions
  • Commitment by Senior and Middle Management
  • Autonomy and Resources
  • Incentives and Disciplinary Measures
  • Continuous Improvement, Periodic Testing and Review
  • Investigation of Misconduct
  • Analysis and Remediation of Any Underlying Misconduct

The Evaluation Guidance contains a number of new topics and specific questions that highlight DOJ’s continued interest, including risk assessments, design of corporate compliance programs, corporate culture, investigations and training. 

Compliance officers should carefully review this new and important document.

I will be posting on specific topics this week and into next to highlight some of the important issues.

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