5 Characteristics of an Effective Corporate Compliance Program

Any corporation whose business extends beyond United States borders must have a comprehensive and effective compliance program to address the rules of the Foreign Corrupt Practices Act – and, for that matter, any additional corruption regulations in countries where they conduct business.

But a good program is more than a set of rules, it’s a culture where corruption is not tolerated, where ethical objectives trump financial goals, where everyone – from the board of directors to part-time employees – understands and buys into the company’s compliance policies.

For your reference, five characteristics of an effective compliance program necessary to create and foster that culture:

1. A code of conduct:

“A Company should develop and promulgate a clearly articulated and visible corporate policy against violations of the FCPA, including its anti-bribery, books and records, and internal controls provisions, and other applicable foreign law counterparts, which policy should be memorialized in a written compliance code.” (FCPA Settlement Day: DOJ Guidance on the Best Practices of a Corporate Compliance Program by Thomas Fox)

2. Clearly defined policies and procedures:

“A strong corporate compliance program should include written and clearly defined policies addressing the FCPA; procedures to disseminate and communicate these policies from the top down; and guidance regarding engaging third-party relationships, including a protocol for gifts, entertainment, travel, political contributions, charitable donations, and due diligence investigations.” (FCPA Enforcement After Lindsey- DOJ’s Aggressive FCPA Pursuits Make Robust Compliance Policies Essential by Dinsmore & Shohl LLP)

3. An effective training program:

“The importance of anti-corruption training is often understated in comparison to other elements of a an anti-corruption compliance program. Perhaps we should start with the term ‘training’ and broaden the concept to what it really is — ‘communicating, listening and responding.’ For compliance officers and staff, training programs is the one critical opportunity to educate, listen and learn from the audience. It is a two-way communication process, and should be viewed that way within the company.” (Training — A Critical Component of an Anti-Corruption Compliance Program by Michael Volkov)

4. The right leadership team:

“… it is important that compliance teams include representatives from legal, human resources, accounting, and audit. Business leaders tasked with building teams would also be wise to ensure that diverse leadership styles are represented on compliance teams.” (The Ideal Compliance Team by Matteson Ellis)

5. A focus on the biggest risks:

“Prioritize compliance resources on the areas of the business that pose the biggest corruption risk. Does your business rely on sales agents in China where many customers are state-owned and the risk of corruption is high? If so, focus on due diligence there. Is your manufacturing run out of India? If so, make sure to address facilitation payments there. The key is to know your business and divert your corporate resources wisely.” (FCPA Compliance: Don’t Blow Your Budget Just Yet by Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C.)

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