Criminal Sentencing Of Corporations

by Michael Volkov

corporationjailContrary to former candidate Romney’s view of the world (“Corporations are people”), you cannot put a company in jail.  Try as you might, it just can’t be done.

How to treat corporations in our criminal justice system is an interesting issue.  Some have even taken the position that corporate criminal liability is misdirected since shareholders are the ones who bear the brunt of any punishment and often have little to do with corporate misconduct.  Others urge reform of the doctrine of respondeat superior which attributes the misconduct of a single employee to the company when acting within his or her scope of duty.

The United States Sentencing Commission has wrestled with this issue for years, which ultimately led to the adoption of the Organizational Guidelines in 1991.  The Sentencing Commission is credited with spurring companies to focus on compliance programs.

Interestingly, in the early years of sentencing under the new Organizational Guidelines a significant percentage of corporate defendants sentenced under the guidelines did not have a compliance program in place.  Only two companies in the last twenty years have been credited with having an “effective” compliance program as defined under the Sentencing Guidelines.

It is very likely that these numbers will change in the next few years.  More companies have a compliance program and a larger number (more than 2) of these companies should have an “effective” compliance program.corpjail3

The Sentencing Commission deserves a lot of credit for its work in this area.  It has recognized the leadership role it can play to improve corporate governance and compliance.  It has devoted time and resources to working with governance, compliance and ethics experts to determine additional incentives and measures to promote compliance.

Chief compliance officers owe a lot to the Sentencing Commission.  In 2010, the Sentencing Commission adopted amendments which required that companies give chief compliance officers direct reporting access to the Board or a Board Committee.  As a result, more chief compliance officers are independent and have greater access to the board.

There is still more the Sentencing Commission can do to promote compliance.

Increased compliance incentives – under the current guidelines a company can earn a three-point reduction in its base offense level for implementing an “effective” compliance program.  The amount of the credit should be increased or a tiered approach could be developed depending on the company’s compliance program.  I have written several times about the problems with a compliance defense and would favor increasing incentives for compliance programs at the sentencing phase.

imagesCA96ONNOSpecific compliance program elements – the Sentencing Commission should review the compliance program elements and propose more specific requirements to reflect “best practices.”  For example, for large companies there is no reason to permit a general counsel to serve as the chief compliance officer.  This principle has been well established by the government and industry.  There are a number of practical points which can be layered into the guidelines without damaging the flexibility needed under the guidelines.

Company size and compliance – under the current guidelines, a comment advises the sentencing court to consider the required compliance program elements in the context of the size of the company.  While it is important for a court to consider this factor in assessing a compliance program, the Commission should try to take this into account in the specific guideline.

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.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.