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 regulations. While the board is not responsible for auditing or ferreting out compliance problems, it is responsible for determining that the company has an appropriate system of internal controls. The board should also monitor company policies and practices that address compliance and matters affecting the public perception and reputation of the company. Every company should ensure that it conducts appropriate compliance training for employees and conducts regular compliance assessments. Finally, the board must take appropriate action if and when it becomes aware of a material problem that it believes management is not properly handling.

There is no reference to prudent discharge in the FCPA itself. However, a  board member might well think more than twice about the prudent discharge of duties to the shareholders, as both the Justice Department and Securities and Exchange Commission now might well wish to look into a Board’s prudent discharge of duties under the FCPA.