The CCO: Co-Equal to the General Counsel in the Eyes of the DOJ?


One of the items that the Department of Justice (DOJ) has increasingly focused on in its enforcement actions is the role of the Chief Compliance Officer (CCO) and whether this position has adequate staffing and resources to accomplish its mandated tasks in a minimum best practices compliance program under the Foreign Corrupt Practices Act (FCPA). In the recent Pfizer Deferred Prosecution Agreement (DPA), it stated regarding the CCO position (called Chief Compliance and Risk Officer) that:

Pfizer will:

a. Maintain the appointment of a senior corporate executive with significant experience with compliance with the FCPA, including its anti-bribery, books and records, and internal controls provisions, as well as other applicable anticorruption laws and regulations (hereinafter “anti-corruption laws and regulations”) to serve as Chief Compliance and Risk Officer. The Chief Compliance and Risk Officer will have reporting obligations directly to the Chief Executive Officer and periodic reporting obligations to the Audit Committee of the Board of Directors.

Regarding the resources which should be dedicated to the compliance function, the Pfizer DPA stated:

Pfizer has committed and will continue the commitment of significantly enhanced resources for the international functions of the Compliance Division that have reporting obligations through the Chief Compliance…

The Pfizer DPA is one in a line of DPAs and Non-Prosecution Agreements (NPAs) where the DOJ and the Securities and Exchange Commission (SEC) have made clear that the CCO must be a senior level employee within the company. I think that this requirement is absolutely mandatory to not only set the proper tone within a company but also to give the CCO and the compliance function the clout needed to implement, enhance and run a minimum best practices FCPA compliance program.

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Published In: Finance & Banking Updates, Franchise Updates, International Trade Updates, Mergers & Acquisitions Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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