There’s not much available from UK regulators on what they expect from an overarching corporate compliance program. Most guidance issued to date has focused on prescriptive compliance with specific regulations. But UK corporations can look to the U.S. Department of Justice (DOJ) for a solid program template.
The DOJ recently issued guidance that centers on helping corporations ensure their compliance program is not just a “paper program” but rather one that is being “implemented, reviewed, and revised as appropriate in an effective manner.” The guidance instructs DOJ prosecutors ask three “fundamental questions” when investigating an organization’s program:
- Is the corporation’s compliance program well-designed?
- Is the program being applied earnestly and in good faith?
- Does the corporation’s compliance program work in practice?
The DOJ places a heavy emphasis on not just the creation, but also the successful implementation of a corporate compliance program. It stresses regular, effective measurement of the program to make sure it’s working correctly.
The DOJ offers numerous suggestions on how to accomplish this, but two stand out. One is corporations need to go further than simply instituting a culture of compliance. They need to measure it often, providing employees at all levels with the ability to offer input on management’s commitment to the culture.
The second is focus on risk assessment and resource allocation. The DOJ is looking for corporations to devote most of their time and resources to high-risk areas, such as questionable payments to third-party consultants, suspicious trading activity, or excessive discounts to resellers and distributors.
For more information on how to create an effective corporate compliance program, consider reading Latham & Watkins article “Lessons for UK Companies From US DOJ Guidance on Corporate Compliance Programs.”