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Volume XI, Number 129

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Top Takeaways: New Steps for Compliance: A Closer Look at the DOJ’s Revised Corporate Compliance Program

The US Department of Justice’s (DOJ) revised compliance program document “The Evaluation of Corporate Compliance Programs,” released June 1, 2020, helps organizations understand how DOJ evaluates compliance programs for effectiveness. Below are the the top takeaways from this revision that you should be aware of.

  1. Three questions the DOJ looks to answer are:

    • Is the corporation’s program well designed?

    • Is the program being applied earnestly and in good faith? (In other words, is the program adequately resourced and empowered to function effectively?)

    • Does the corporation’s program work in practice?

  2. Under the June 2020 updates, the DOJ will increase its focus on evaluating how effectively compliance programs are tailored to the organization’s risk profile, including the company’s size, industry, geographic footprint, regulatory landscape and other factors.

  3. Compliance programs should continuously evolve to pass muster under the DOJ’s updated guidance. Programs are expected to adapt based on review of new data, as well as lessons learned from the company’s own experiences and the experiences of similar companies.

  4. The design of compliance programs will be even more closely scrutinized. The DOJ has added more detailed questions on program design, including, among others, have the policies and procedures been published in a searchable format?; how do employees ask questions during on-line trainings; and does the company take measures to test whether employees are aware of the compliance hotline and feel comfortable using it?

  5. The importance of adequate resources for the compliance function—both financial and data resources—is emphasized in the updated guidance. The compliance team should be empowered to function “effectively,” including having sufficient access to relevant data.

  6. Due diligence around third parties and acquisition targets heightened attention under the updated guidance. Business rationale for needing a third-party partner, risk management steps, compliance integration and post-acquisition compliance audits should all be considered.

  7. The “tone in the middle” is equally important as the “tone at the top” under the revised guidance. Company leaders and managers should instill a “culture of compliance” at all levels and execute the program across the entire organization.

  8. Board audit and compliance committees will be tasked with working with senior leadership to evaluate and implement changes to the compliance program suggested by the revised DOJ guidance. Committee members should give serious consideration to the revisions presented in the guidance, discuss them with the general counsel and the chief compliance officer and recommend possible plan changes to the full board.

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© 2021 McDermott Will & EmeryNational Law Review, Volume X, Number 169
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Michael Peregrine Corporate Governance Lawyer McDermott
Partner

Michael W. Peregrine is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  He represents corporations (and their officers and directors) in connection with governance, corporate structure, fiduciary duties, officer-director liability issues and charitable trust law.  Michael is recognized as one of the leading national practitioners in corporate governance law.

Michael is outside governance counsel to many prominent corporations, including hospitals and health systems, voluntary health...

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Tony Maida Health Care Attorney McDermott WIll Law Firm
Partner

Tony Maida is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s New York office.  Tony has extensive experience in health care fraud and abuse and compliance issues, including the federal Anti-Kickback and Physician Self-Referral/Stark laws, false claims and overpayments, and government investigations.    He works closely with our health and white collar teams on criminal, civil, and administrative investigations and counseling clients on corporate transactions and compliance programs.

Tony previously served...

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Sarah Walters, Mcdermott Will Emergy, Trial Lawyer
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Sarah Walters is an experienced trial lawyer who focuses her practice on white collar criminal defense, regulatory enforcement and compliance matters, and complex civil litigation. In addition to both criminal and civil trial work, Sarah has substantial experience conducting internal investigations and assists companies in developing compliance policies and training programs.

Before joining McDermott, Sarah served 10 years as an Assistant United States Attorney in the Boston US Attorney’s office, holding the position of Chief of the Economic...

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