On February 8, and without the traditional fanfare that often accompanies new corporate-fraud guidance, the Fraud Section of the U.S. Department of Justice posted a document on its website entitled “Evaluation of Corporate Compliance Programs”). The stated purpose of the compliance guidance is to provide more transparency about federal prosecutors’ review of compliance programs under the department’s corporate-charging guidelines, and no doubt reflects the influence of the department’s compliance consultant, Hui Chen, who was hired in November 2015.
The compliance guidance outlines 11 broad “sample topics and questions” in a checklist format. While the compliance guidance cautions that “each company’s risk profile and solutions to reduce its risks warrant particularized evaluation,” it is noteworthy when the department issues written guidance on its approach to evaluating corporate criminal conduct and remediation.
“Sample Topics” Emphasized by the Department
The compliance guidance is divided into 11 sections, and includes a series of questions reflecting how the department will evaluate a company’s investigation and remediation in each area.
- Analysis and Remediation of Underlying Conduct
- Senior and Middle Management
- Compliance Autonomy and Resources
- Policies and Procedures
- Risk Assessment
- Training and Communication
- Confidential Reporting and Investigation
- Incentives and Disciplinary Measures
- Continuous Improvement, Periodic Testing, and Review
- Third-Party Management
- Mergers and Acquisitions
The compliance guidance draws from existing guidance, including the U.S. Federal Sentencing Guidelines, the U.S. Attorney’s Manual, A Resource Guide to the U.S. Foreign Corrupt Practices Act, and published best practices, including those in the Anti-Corruption Ethics and Compliance Handbook for Business published by the Organization for Economic Cooperation and Development, the United Nations Office on Drugs and Crime, and the World Bank.
In the past several years, the Fraud Section has made significant efforts at transparency in the enforcement of corporate criminal law. Building on prior efforts, the compliance guidance is another useful step. While the document does not break new ground or offer a magic formula for compliance professionals or corporate executives, it does provide a relevant road map for the types of questions the department will ask if a company comes before the DOJ and must explain itself. Although most companies will never face direct evaluation of their compliance program by the department, the compliance guidance will serve as an important reference point for evaluating whether compliance programs measure up to the expectations of enforcement authorities.