Resource Guide to the FCPA.
The Department of Justice and the Securities Exchange Commission delivered a 134 page guide to the Foreign Corrupt Practices Act. The Guide is an unprecedented undertaking by DOJ and SEC to provide the public with detailed information about the approach and priorities of the FCPA enforcement. Specific benchmarks were identified to measure the effectiveness of a compliance program. Ensuring your compliance program reaches these benchmarks may ultimately save your company from significant financial loss and reputation damage.
Tone at the Top.
The top of the organization must actively encourage a compliant culture through out the organization. Managers and employees at all levels must be aware of the executive expectation to discourage pure profit over compliance with laws and regulations.
Code of Conduct.
When the DOJ and the SEC evaluate a compliance program, they begin with the company code of conduct. They determine if the compliance policies are easily accessible, clearly defined and there is a clear outline of responsibilities for compliance. The code of conduct should be translated into different languages to ensure all employees are capable of comprehension. The DOJ and the SEC will consider whether the policies incorporate risks with third parties, travel, gifts, and entertainment. These responsibilities should be outlined in detail with proper internal controls and auditing as well as a defined disciplinary procedures.
Adequate Resources.
Depending on the size of the organization, as well as the industry, geography and unique risks, the company must allocate resources to the compliance program. The compliance initiative should be overseen by a senior executive with the authority and direct access to the governing body of the company.
Custom Compliance.
Because your company is unique, you need a unique compliance program. Generic training will not be effective to the particular needs of your employees. Continuing education and regular training for employees and third parties will be most effective when directly applicable to your business.
Process and Procedures.
The DOJ and the SEC will look for clear and consistent procedures from standard training to continuous awareness to appropriate disciplinary action. The Guide to the FCPA states: “a compliance program should apply from the board room to the supply room—no one should be beyond its reach.”
Due Diligence.
Third parties and acquisitions are often the most vulnerable area for FCPA violations. The DOJ and SEC recommend ongoing monitoring of vendors, distributors and partners. Software is available to conduct background checks, monitor business transactions, identify red flags and organize your company’s due diligence efforts. New employees should receive compliance training within the first 90 days of employment.
Whistleblower Non-Retaliation.
It is strongly recommended to establish clear guidance for employees to report suspicions of wrong doing. The employee is more likely to report corruption if they believe they will remain anonymous and there is no possibility of any retaliation to a valid concern. The DOJ and SEC have identified declinations for recognizing secure and confidential internal controls.
Culture of Compliance.
The most effective compliance programs are dynamic and continue to evolve. The material in one compliance course may be forgotten. However, a toolkit or an awareness campaign including video shorts, online games, quizzes, blogs, posters, and postcards which will support the course will cultivate a continuous culture of compliance.
