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Board’s prudent discharge of compliance obligations

Tom Fox | February 26, 2018

What are the obligations of a board member regarding the Foreign Corrupt Practices Act? Are the obligations of the Compliance Committee under the FCPA at odds with a director’s “prudent discharge of duties to shareholders”? Do the words prudent discharge even appear anywhere in the FCPA? As to the specific role of best practices in the area of general compliance and ethics, one can look to Delaware corporate law for guidance.

A board of director’s role is not to actually manage the company, but instead to oversee and monitor the management of the company. In the realm of compliance, this means the chief compliance officer. The board has the responsibility to fulfill the role of strategic and business adviser to management of the company. In addition, the board has the role of monitoring the performance of the compliance function, including monitoring the performance of it using customary economic metrics and overseeing compliance with applicable laws and...

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