New guidance issued by the U.S. Department of Justice (DOJ) highlights the importance of updating corporate compliance programs to satisfy regulatory requirements. The 2020 updates pick up where the 2019 guidance left off in addressing the evaluation metrics for compliance. The key takeaway for 2020 is that companies are encouraged to update and improve compliance programs with the latest in technology, systems and training.
The three questions considered by the DOJ in evaluating corporate compliance programs include:
- Whether the program is well-designed?
- Is the program being applied earnestly and in good faith?
- Does the corporation’s compliance program work in practice?
With respect to design, the DOJ focuses on the program’s thoroughness and risk assessment practices based on access to data on operations, as well as the incorporation of “lessons learned” both internally and within the company’s industry. The 2020 Guidance also suggests that periodic audits should be used to test the effectiveness of the program.
A determination that the program is being applied earnestly and in good faith will require a culture of compliance at all levels of the organization with implementation by all tiers of management. In addition to requiring that compliance personnel have sufficient access to data, an organization should also demonstrate consistency in its investigations and disciplinary actions. According to the 2020 Guidance, whether a compliance program can satisfy the ability to work “in practice” will largely depend on whether the program evolved in a manner that addresses existing and changing compliance risks over time.
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