“Compliance programs help prevent companies from committing crimes in the first place. Even if they fail to do so, partially successful compliance programs may help companies qualify for leniency. Either outcome easily warrants your companies’ efforts to adopt and strengthen compliance programs.” –Brent Snyder

Brent Snyder, Deputy Assistant Attorney General for the U.S. Department of Justice (DOJ) Antitrust Division, made this statement recently at a workshop sponsored by the United States Council for International Business and the International Chamber of Commerce. He was speaking specifically about compliance programs as a deterrent to antitrust behavior to an audience that was there to learn about implications for international business, but the message has a broader reach.

In his remarks, Snyder provided answers to the question of what makes an effective compliance program. A compliance program, he said, should be designed to account for the nature of a company’s business and for the markets in which it operates. There are some common elements the DOJ’s antitrust division looks for, however.

Senior executive and board of directors support, engagement, and behavior

“If senior management does not actively support and cultivate a culture of compliance, a company will have a paper compliance program, not an effective one. Employees will pick up on the lead of their bosses.”

Company assurance that the entire organization is committed to its compliance efforts and can participate in them

“This means educating all executives and managers, and all or most employees …. When appropriate, it may also mean providing training for subsidiaries, distributors, agents, and contractors. And, it means providing all members of the organization the opportunity to report anonymously and seek guidance about potential or actual criminal conduct without fear of retaliation.”

Company assurance that it has a proactive compliance program

“This means that in addition to providing training and a forum for feedback, a company should make sure that at-risk activities are regularly monitored and audited. An,d the company should regularly evaluate the compliance program itself to understand what it can improve.”

Appropriate, consistent policies for all individuals engaged in conduct inconsistent with an effective compliance program

“A company’s retention, however, of culpable employees in positions where they can repeat their conduct, impede a company’s internal investigation and cooperation, or influence employees who may be called upon to testify against them, raises serious questions and concerns about the company’s commitment to effective antitrust compliance.”

Appropriate steps to stop criminal conduct from happening again

“Finally, a company that discovers criminal antitrust conduct should be prepared to take the steps necessary to stop it from happening again. This likely includes making changes to the compliance program that failed to prevent the criminal conduct initially. A company should also recognize that, in such circumstances, it will be required to accept responsibility for that conduct …”

Snyder acknowledged that while the U.S. Sentencing Guidelines allow companies to receive lower fines if they have “effective” compliance programs and report misconduct in advance of a company coming under investigation, it does not often happen.

He told the audience that the Antitrust Division is actively considering ways in which it can credit companies that proactively adopt or strengthen compliance programs after coming under investigation. He said “any crediting of compliance will require a company to demonstrate that its program or improvements are more than just a facade. … true compliance starts at the top, is not optional, and is part of the company’s culture.”

It is much more difficult to create or change a company’s culture than to implement a program or a policy. But for a program or policy to be effective, it must be reflected in day-to-day behavior. And that comes from a culture of ethics and compliance.

Ethical Advocate provides comprehensive ethics and compliance solutions, including ethics and compliance training and confidential and anonymous hotlines, meeting Sarbanes-Oxley (SOX), Federal Acquisition Regulation (FAR), and other regulatory and reporting needs. Please contact us for more information.

References:

Snyder, Brent. “Compliance is a Culture, Not Just a Policy.” Remarks as prepared for the International Chamber of Commerce/United States Council of International Business Joint Antitrust Compliance Workshop, New York, NY, September 2014. http://www.justice.gov/atr/public/speeches/308494.pdf