If anyone thought that DOJ was planning to relax its expectations regarding corporate compliance programs, forget it – DOJ has removed all doubt. In an announcement on Monday, June 1, 2020, DOJ released revised guidance, Evaluation of Corporate Compliance Programs, June 2020. DOJ issued the new guidance to reflect its own experiences and feedback from the compliance and business community. According to Assistant Attorney General...
The drug and medical device/testing industry is under significant pressure to develop new products to address the COVID-19 pandemic. The federal government is increasing spending and support of drug and device companies in anticipation of developing a new vaccine, treatment products and testing. As a result, pharmaceutical, medical device and diagnostic and laboratory tests will be subject to federal scrutiny and monitoring for proper use...
Boeing is still under investigation. A grand jury is investigating potential safety and obstructions allegations. Congressional investigations are continuing. Civil litigation surrounding the 737 Max are continuing. Boeing’s long path out of this nightmare appears to be rocky and filled with continuing risks, financial harm and reputational risks. In reviewing the wreckage surrounding Boeing’s culture and safety performance, public disclosure of over 100 pages of...
Boeing’s 737 Max problems began over ten years ago. Facing competitive pressure from Airbus, Boeing embraced the 737 Max as its competitive savior. After two horrific crashes killing a total of 346 people, the FAA ordered the grounding of the 737 Max. Despite the grounding, Boeing produced another 400 737 Max airplanes before ceasing all manufacturing of the airplane in January 2020. The two plane...
When a company suffers from serious misconduct, the source of such a failure usually lies in its corporate culture. I know this theory sounds relatively obvious, but bear with me here. The CEO and senior management and the corporate board are responsible for creating, oversight and monitoring of a company’s culture. Corporate boards and senior management work together, communicate regularly and should set an example. ...
NAVEX Global produces a number of valuable compliance reports. Aside from its annual Third-Party Risk Management Report, NAVEX Global’s Hotline and Incident Report is always valuable given its leadership role in the hotline and incident management industry. The NAVEX Global Report is based on 2019 data before the pandemic occurred. Nonetheless, the insights are helpful and provide important insights that can be applied in a...
We are finally reaching the end of the road on the beneficial ownership path. In this last posting on the issue (for now), let’s start with a third-party population (third parties, vendors, suppliers) which have been classified into three categories, the first two of which fall into high-risk (foreign government interaction/representation and government ownership). The bulk of the population, usually around 80 to 85 percent...
At the outset, if you have a headache after reading my first two posts on the beneficial ownership issue, I apologize. The issues twist and turn depending on whether the situation involves OFAC sanctions or corruption risks, and reflects the variety of ownership situations that occur. Given the overwhelming nature of the burden of a beneficial ownership risk mitigation strategy, we have to return to...
When discussing the importance of beneficial ownership with compliance professionals, there is often a disconnect between the theory and reality. Everyone understands the legal and compliance risks and how they apply to third-parties, vendors and suppliers. But when a compliance officer considers the burden of uncovering beneficial ownership interests, they quickly resist the need for such an analyses across the population. And for good reason....
We repeatedly hear about the importance of beneficial ownership, and the requirement that companies confirm beneficial ownership of its third-parties, vendors and suppliers. At the same time, there is increasing pressure from regulators and law enforcement to identify and unravel beneficial ownership when dealing with business partners. There is no question that beneficial ownership is a critical issue. I have frequently stated (i.e. repeated myself)...
