FCPAméricas Blog
DOJ’s New Compliance Consultant: Real Versus Paper Compliance Programs
12.09.2015
This guest post is authored by Ben Gao and Alice Hsieh, associates at Miller & Chevalier Chartered.
At the November 2015 ACI International Conference on the FCPA, Hui Chen, the new “compliance expert” at DOJ’s Fraud Section, outlined her still “evolving” thinking on what separates a “real” compliance program from a “paper-based” one. This is of particular interest given Chen’s expected role in helping DOJ prosecutors and compliance monitors to evaluate companies’ compliance programs and remediation efforts.
Chen is a former prosecutor and compliance executive at three companies that each face distinct compliance challenges—Standard Chartered, Pfizer, and Microsoft. The DOJ hired her in early November 2015 as an outside consultant to the Fraud Section. Chen made her comments at the ACI conference on a panel with Andrew Weissmann, the Fraud Section’s Chief.
Chen began her remarks by giving a nod to her “fellow compliance professionals” and promising to act as a “bridge” between the compliance community and prosecutors. Accordingly, Chen said that the DOJ is planning town halls where in-house compliance professionals can discuss their concerns with her anonymously (Chen emphasized that she is a consultant, not an employee, to the DOJ).
Chen identified four broad considerations that, in her view, separate a “real” compliance program from a “paper-based” one:
- Is the program “thoughtfully designed”? According to Chen, companies need to proactively identify risks. Thoughtful examination of the company’s business is one way of doing this. For example, conducting significant business in Syria and Iran but failing to realize associated sanctions risks is not acceptable. Talking to stakeholders is another way. For example, instead of asking lawyers to put together “beautiful” policies in isolation, companies should create “workable” policies by talking to stakeholders who must follow the policy.
- Is the program “operational”? Chen stressed that compliance processes need to be tied to business processes, such as payment management, procurement, or HR. Integrating processes make them easier for employees to follow, upping the chance of actual compliance. Conversely, audit and investigation findings must find their way, on an ongoing basis, back to enhancing business processes.
- Is there good communication among stakeholders? Chen emphasized that compliance cannot function in isolation but must constantly talk to other functions in the business. Indeed, some of her “most fascinating and helpful conversations” have been with ground-level employees such as a back-room payment clerk.
- Is the compliance program adequate resourced? Chen stressed that resources do not just mean money, but also “are your compliance people at the table when you make important decisions that have compliance implications.” She commented that boards and senior management should regularly ask their compliance team how best to empower the compliance function, and then take action accordingly. Weissmann added here that compliance personnel’s qualifications matter: they must have the necessary skills to understand the transactions presented and catch compliance implications.
Chen’s considerations do not significantly depart from prior enforcement agency guidance, but she has placed particular emphasis on how effectively a compliance program operates in practice. In that context, she appears particularly interested in promoting (1) more deeply imbedding the compliance program into every level of business, and (2) giving ground-level employees a greater voice in designing and operating the compliance program.
For companies under investigation, Chen’s role presents a new challenge, but also a potential opportunity. Credit for remediation and compliance enhancements may well become more difficult to obtain. But, by lending credibility to truly effective compliance programs, Chen could help companies that have invested in such programs differentiate themselves and potentially reap more substantial rewards from their investments.
The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.
© 2015 FCPAméricas, LLC
Post authored by Guest
Comments