Yet another federal official is stressing the importance of quality compliance programs, this time in the context of avoiding antitrust trespasses. In a speech delivered during a compliance workshop held by the International Chamber of Commerce and the U.S Council of International Business in New York, Brent Snyder, deputy assistant attorney general for the Department of Justice’s antitrust division, shared his thoughts on corporate compliance efforts and revealed that the DoJ is considering ways to offer credit and leniency for companies that adopt or strengthen compliance programs after coming under investigation.
“The most effective way to stop crime is to ensure it never starts,” he said. “A truly well-run compliance program should prevent a company from conspiring to fix prices, rig bids, or allocate markets. Effective compliance programs should prevent that crime from beginning or, at a minimum, detect it and stop it shortly after it starts.”
The best outcome for a company and its shareholders is to never be a subject of an international cartel investigation and suffer its many consequences, among them high fines, jail time for executives, attorneys’ fees; civil damages, exposure to further criminal investigations, bad publicity, and distractions from the actual business of the company, Snyder said. “Compliance is especially important because the risk of detection and punishment has never been higher,” he added. “Dozens of countries have effective and aggressive cartel enforcement programs and an increasing number of them have followed the U.S.'s lead and criminalized anticompetitive conspiracies.”
When a compliance program falls short of preventing all collusion, it still has the option to self-report its conduct through his division’s Corporate Leniency Program, Snyder said. In exchange for self-reporting and fully cooperating with the resulting investigation, a corporate leniency applicant may not be prosecuted. Companies may also apply for leniency abroad, as dozens of countries have similar programs.
What makes an effective compliance program? Snyder concedes there is no universal answer and efforts must be tailored to the nature of a company’s business and markets in which it operates. Consulting the Federal Sentencing Guidelines’ minimal requirements of an effective compliance and ethics program, however, help zero in on best practices.
Among his suggestions for maintaining a quality compliance program:
Senior management must support compliance effort, make sure the program is implemented successfully, and providing necessary resources and staffing.
All executives and managers, and most employees – especially those with sales and pricing responsibilities, must be properly trained and educated. When appropriate, training should also be required for subsidiaries, distributors, agents, and contractors.
All members of the organization must have the opportunity to report anonymously and seek guidance about potential or actual criminal conduct without fear of retaliation.
Ensure that at-risk activities are regularly monitored and audited.
A company should be willing to discipline employees who commit antitrust crimes or fail to take the reasonable steps necessary to stop the criminal conduct in the first place.
Snyder stressed the importance of establishing a corporate culture that discourages malfeasance. “If senior management does not actively support and cultivate a culture of compliance, a company will have a paper compliance program, not an effective one,” he said. “Employees will pick up on the lead of their bosses… When senior management takes a lax approach to questionable competitor contacts or bosses make jokes about reaching agreements with competitors, they increase the likelihood that employees will treat compliance as optional.”
While receiving leniency is the ultimate credit for having an effective compliance program, in some cases a company can help its cause by rebuilding their program after an investigation has already commenced. This can potentially help avoid probation requirements, such as the appointment of a compliance monitor.
“In addition, we are actively considering ways in which we can credit companies that proactively adopt or strengthen compliance programs after coming under investigation,” Snyder said. “Although we have not finalized our thinking in this area, any crediting of compliance will require a company to demonstrate that its program or improvements are more than just a facade.
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