On Monday, November 1, 2004, the U.S. Sentencing Commission's revised federal sentencing guidelines became effective, requiring directors and executives to "take an active leadership role for the content and operation of compliance and ethics programs."
Promulgated in 1987 and effective since 1991, the guidelines outline the elements of a corporate compliance program, creating a sentencing credit for organizations that put in place "effective programs to prevent and detect violations of law."
Earlier this year, an "Ad Hoc Advisory Group" that was established to help redefine such corporate compliance programs released its recommendations for changes to the guidelines. Those changes were submitted to Congress in May, and are now effective.
Among the changes is a new, stand-alone guideline that describes "more fully those essential attributes of successful compliance programs." The new guideline emphasizes monitoring, auditing, assessing and evaluating programs. In addition, the roles of the organization's management and leadership are reinforced; gone are the ambiguities regarding what defines an "effective compliance program" and on whom responsibility falls.
The new standards for compliance and ethics programs are more rigorous, and put greater responsibility on boards of directors and executives for the oversight and management of compliance programs. In particular, directors and executives now "must take an active leadership role for the content and operation of compliance and ethics programs."
Companies that seek reduced criminal fines now must demonstrate that they have identified areas of risk where criminal violations may occur, have trained high-level officials as well as employees in relevant legal standards and obligations, and have provided compliance officers "sufficient authority and resources to carry out their responsibilities."
Over the past several years, Compliance Week has published numerous articles, commentary, guest columns, and guidance on the new guidelines. A number of those documents are available from the box at right.
In addition, subscribers can contact the Compliance Week Research Department toll free at (888) 519-9200 if assistance is need to track down information on the new guidelines.