Last month, the U.S. Department of Justice Criminal Division released the Updated Evaluation of Corporate Compliance Programs (the “Guidance”), which provides updates and recommendations for evaluating the effectiveness of a corporation's compliance program in preventing and detecting employee wrongdoing.
Key Takeaways for Corporate Compliance Programs:
- A well-designed corporate compliance program is critical to preventing and detecting employee wrongdoing.??
- Clear policies and procedures should be implemented for reporting suspected misconduct.
- Root cause analysis should be conducted to identify areas where certain conduct is comparatively over or under-reported.?
- Factors to consider when evaluating the effectiveness of a compliance program: the average time for completing investigations into hotline reports, and how consistently investigations are managed.
- Testing effectiveness, including tracking hotline reports from start to finish, ensures that a compliance program is adequately designed.
- Employee training should be conducted at least annually to refresh staff on relevant compliance policies and procedures.
- Appropriate disciplinary measures should be implemented for employees who violate compliance policies and procedures.
- Regular review of, and updates to, compliance programs will help ensure they remain effective.
Note that the Guidance further provides insight into having a confidential reporting structure and investigation process, along with continuous improvements, periodic testing, and ongoing review of the compliance program.
