The Justice Department continues to evolve in its consideration of what constitutes a best practices compliance program. It now considers not only the authority of the chief compliance officer to report directly to the board of directors, but also such areas as the monetary and head count resources for the compliance department and the expertise of its members as well.
What resources have been made available to your organization’s compliance function? This would include both monetary budget for operationalization but also head count resources. One might hope the days have long since passed when companies would come into the Justice Department and plead the compliance function had just $100,000; $200,000; or you name the figure in resources to be met with the prosecutor’s question, “What was your annual spend on yellow-sticky note pads?” When the inevitable response was considerably more than the entire compliance budget, the prosecutor’s response was something along the lines of “Which is more mission critical for complying with the law?”
Another evolution in the Justice Department’s thinking is in experience and qualifications for the compliance function. In the DOJ Pilot Program, Prong 3 says, “The quality and experience of the compliance personnel such that they can understand and identify the transactions identified as posing a potential risk.” In the DOJ Evaluation of Corporate Compliance Programs, it was expanded to the following question, “This has been broadened to “Have the compliance and control personnel had the appropriate experience and qualifications for their roles and responsibilities?” Finally, the new FCPA Corporate Enforcement Policy it stated, “The quality and experience of the personnel involved in compliance, such that they can understand and identify the transactions and activities that pose a potential risk.”
The Evaluation of Corporate Compliance Program and 2017 FCPA Corporate Enforcement Policy both demonstrate the continued evolution in the thinking of the Justice Department around the CCO position and the compliance function. Their articulated inquiries can only strengthen the CCO position specifically and the compliance profession more generally. The more the Justice Department talks about the independence of, coupled with resources being made available and authority concomitant with the CCO position, the more corporations will see it is directly in their interest to provide the resources, authority, and gravitas to the compliance position in their organizations.