Recently confirmed Assistant Attorney General of the U.S. Department of Justice Criminal Division, Leslie Caldwell, has laid out her views as to what comprises the “hallmarks of good compliance programs.” In her new position, AAG Caldwell will repeatedly be in the position to decide whether corporate compliance programs are sufficient when making charging and settlement decisions and so her views on the subject are of particular import.
During an October 1, 2014 speech at the 22nd Annual Ethics and Compliance Conference, Caldwell highlighted the following:
- Companies must exhibit a high-level and visible commitment to compliance from senior management;
- Companies should have written policies in place that enables employees to, as easily as possible, figure out what to do or not do when faced with an ethical judgment call;
- Companies should have periodic risk-based review to evaluate the written compliance codes and ensure they are evolving with the company; and
- Senior executives should be assigned to implement and oversee the compliance programs and these executives should have the authority to report directly to independent monitoring bodies and have “teeth and respect within the company.”
Caldwell also said that companies should have training and guidance mechanisms, internal reporting systems, a process for investigating alleged violations, enforcement and discipline mechanisms, requirements pertaining to the oversight of all third-party relationships, and monitoring and testing of compliance codes.
Caldwell further explained that effectively implementing the programs is “as important as the compliance program itself.” It is no defense to claim that “everyone else is doing it.” Instead, she said that an effective compliance program must be embedded in the culture of a company, even in the face of misconduct by other companies in the same industry.
When a compliance program fails or when it reveals misconduct, Caldwell recommended corporate cooperation with any government investigation, saying that it is a “critical factor” in DOJ’s prosecutorial decision making and can decrease, by millions, any sanction imposed. She recommended that companies provide relevant documents and evidence in a timely fashion and not interview their employees to “whitewash” bad facts or spread the “narrative spin” of the company.