Horizon Scanning Alert: DOJ Evaluation of Corporate Compliance Programs
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.