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Board of directors’ compliance committee

Tom Fox | November 20, 2017

Under the U.S. Sentencing Guidelines, the board must exercise reasonable oversight on the effectiveness of a company’s compliance program. The U.S. Department of Justice (DOJ) Prosecution Standards posed the following queries: (1) Do the directors exercise independent review of a company’s compliance program? and (2) Are directors provided information sufficient to enable the exercise of independent judgment? Moreover, the FCPA Guidance requires a CCO to have direct access to the board or an appropriate sub-committee. The guidance also requires a tangible commitment from the top levels of an organization, starting with the board of directors that the company create an ethical culture.

At the board of directors level, a board compliance committee can devote itself exclusively to non-financial compliance, such as FCPA compliance. While many companies have fulfilled these obligations through an audit committee, clearly the better practice is to have a separate compliance...

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