Corporate Board members face even more risks in today’s aggressive FCPA enforcement environment. They have adjusted to the new post-Sarbanes-Oxley environment. Today, they face the perils of FCPA enforcement.
As the Justice Department and the SEC bear down on more and more companies, Board members have to be even more sensitive and careful when it comes to FCPA enforcement.
If you read between the lines of recent DOJ and SEC settlement filings, the message is clear that corporations that cooperate fully will be rewarded versus those companies that resist acknowledging potential violations and cooperating with the government. With so much at stake, the actions of the Board are critical.
The Board has a fiduciary duty to the company to ensure compliance with the law. The Board’s initial response to potential FCPA violations is critical. If the Board is divided on this issue, the possible risks multiply.
For example, what if the Board disagrees as to whether or not company employees’ conduct violated the FCPA? What if top management is divided? The General Counsel may conclude one way, while the CEO reaches a different conclusion. What if top management is alleged to participated, or reviewed the conduct?
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