"Directors and executives now must take an active leadership role for the content and operation of compliance and ethics programs," the U.S. Sentencing Commission's statement reads in part. "Companies that seek reduced criminal fines now must demonstrate that they have identified areas of risk where criminal violations may occur, trained high-level officials as well as employees in relevant legal standards and obligations, and given their compliance officers sufficient authority and resources to carry out their responsibilities."
The commission notably adds: "If companies hope to mitigate criminal fines and penalties, they must also promote an organizational culture that encourages a commitment to compliance with the law and ethical conduct by exercising due diligence in meeting the criteria."
Every Fortune caliber organization from financial services to health care has already implemented a pervasive compliance program to mitigate the risk of ending up with the SEC or US Attorney in the lobby.
The catalyst behind these initiatives is generated from the U.S. Sentencing Commission's Organizational Sentencing Guidelines. They allow for more lenient sentencing if an organization has evidence of an "effective program to prevent and detect violations of law."
The Guidelines contain criteria for establishing an "effective compliance program."
These include oversight by high level officers, effective communication to all employees, and reasonable steps to achieve compliance such as:
- · Systems for monitoring and auditing
- · Incident response and reporting
- · Consistent enforcement including disciplinary actions
Yet the corporate incivility continues. Why is it that we can’t pick up the morning paper or listen to the news on the way to work without hearing about a new indictment of a top ranking officer?
Here lies the question many Board of Directors are scratching their heads about these days. How can we avoid these ethical and legal dilemmas and how can they be addressed without creating a state of fear and panic?
That’s when we really learned that this game of business is just about the human factors. It’s really not about the controls, the monitoring or even the awareness programs. It’s about being a model manager, and a model human being.
The odds are it will be the human factors that are going to be what gets you on the steps of the local federal building. And it all comes back to good old-fashioned management 101.
As indicated, the great manager can impact the lives of tens or hundreds of people in your company. Conversely, the uncivil manager can wreak havoc with a similar numbers of lives. The position of management is ever so powerful to influence those around them.
Your company wide compliance initiative has the elements that provide guidance for creating a program that the government is likely to look favorably upon. The problem is that these same criteria inadvertently communicate the message that implies building a program based on this formula is enough. It isn’t.