31 Days to a More Effective Compliance Program- Board of Directors’ oversight as an internal control

Thomas Fox
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Is a Board of Directors a compliance internal control? The clear answer is yes. In the 2020 FCPA Resource Guide, Hallmarks of an Effective Compliance Program, there are two specific references to the obligations of a Board in a best practices compliance program. One states, “Within a business organization, compliance begins with the Board of Directors and senior executives setting the proper tone for the rest of the company.” The second is found under the Hallmark entitled “Oversight, Autonomy and Resources,” which says the CCO See more +
Is a Board of Directors a compliance internal control? The clear answer is yes. In the 2020 FCPA Resource Guide, Hallmarks of an Effective Compliance Program, there are two specific references to the obligations of a Board in a best practices compliance program. One states, “Within a business organization, compliance begins with the Board of Directors and senior executives setting the proper tone for the rest of the company.” The second is found under the Hallmark entitled “Oversight, Autonomy and Resources,” which says the CCO should have “direct access to an organization’s governing authority, such as the Board of Directors and committees of the Board of Directors (e.g., the audit committee).”

Three key takeaways:

1. Board oversight over the compliance function is a separate internal control so document it and use it.

2. Board must perform oversight over your company’s internal controls.

3. Does your Board use the five principles for involvement in compliance internal controls? See less -

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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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