A Prosecutor's Guide to Evaluating a Compliance Program: What Should Your Board Be Asking?

By Saul Helman, Mark Farrar, Johna Carufel, and Elizabeth Prinzi

The U.S. Department of Justice (DOJ) Criminal Division announced, on April 30, 2019, the release of a guidance document for prosecutors on the evaluation of corporate compliance programs. This guidance reflects the DOJ’s evolving view of compliance program effectiveness.

Boards and management should enhance their evaluation of the company’s compliance program with this guidance in mind. While there is no set formula to evaluate the effectiveness of a compliance program, there are three fundamental questions raised by this guidance:

  1. Is the Compliance Program Well-Designed?
  2. Is the Program Being Implemented Effectively and in Good Faith?
  3. Does the Compliance Program Work in Practice?

Effective compliance programs play a critical role in preventing misconduct, facilitating investigations, and informing fair resolutions. Today’s guidance document is part of our broader efforts in training, hiring, and enforcement to help promote corporate behaviors that benefit the American public and ensure that prosecutors evaluate the effectiveness of compliance in a rigorous and transparent manner.

Assistant Attorney General Brian A. Benczkowsk

Is the Compliance Program Well-Designed? 

The guidance emphasizes a focus on a living, breathing, evolving compliance program that is designed to prevent and detect misconduct, and specifically discusses six elements of a well-designed compliance program aimed at preventing and detecting wrongdoing.

Within each of these six elements, the board of directors and management should be able to affirmatively answer questions that provide the necessary probing on both functionality and effectiveness of the compliance program design.

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