[1]One of the most important elements of an effective FCPA compliance program is top-level commitment, what might be called “tone from the top.” Those at the top of an organization are in the best position to foster a culture of compliance. As indicated in the FCPA Guidance [2], the DOJ and SEC “consider the commitment of corporate leaders to a culture of compliance” when assessing compliance programs.
There are practical steps that top-level management can take to demonstrate commitment to FCPA compliance. This post highlights four.
Written statements to employees. Written statements from top-level management to employees help communicate (and document) the company’s ethical standards. These statements can take different forms. They may include a message from the CEO introducing the company’s Code of Conduct and/or FCPA Policy. Management can send periodic emails to employees, tailored to different audiences, that draw attention to the company’s zero tolerance of bribery or specific features of the compliance program. It can make available compliance reminders on the company’s intranet or other visible areas. The written statements to employees may include references to the company’s commitment to doing business in compliance with applicable laws and can explain the consequences of breaching the law and the company’s policies.
Face-to-face conversations with employees. To the extent possible, top-level management should consider being present during FCPA compliance trainings. Employees tend to pay more attention when management is present. If this is not feasible due to the company’s size, top-level managers can still convey compliance messages at other times, such as in annual sales meeting.
In one series of trainings that I conducted throughout Brazil for a multinational company, the CEO thought the subject was so important that he attended all sessions. He even delivered part of the training himself, explaining how the company’s hotline worked, and made comments throughout the presentation. By engaging in this way, the CEO demonstrated the company’s strong commitment to ethical values. The employees were focused the entire time. Some of them had never even met the CEO in person.
Involvement in prevention. Effective leaders take a proactive involvement in prevention efforts. This can take different forms. In smaller companies, top-level management may be personally involved in the development and implementation of anti-corruption policies and procedures. In larger organizations, the board of directors and top-level executives may forcefully ensure implementation and continuous monitoring of anti-corruption policies and procedures. Proactive leaders will ask to be updated on regular basis about the status of policy implementation, monitoring, and enhancement. Top management should also make sure that specific anti-corruption training is delivered to middle management. Trained and compliant middle management, in turn, will not only encourage employees to strive to attain those standards throughout the organization but can also serve as local gatekeepers
Adherence to the rules. When top management is involved in violating a company’s policies and procedures, otherwise making efforts to establish a culture of compliance is meaningless. Leadership should adhere to rules and be living examples of good behavior. This includes not only leadership at the headquarters but also at the subsidiaries and local offices. This will encourage employees themselves to follow the rules and disseminate them throughout the organization. When a top-level executive is the one involved in the wrongdoing, the company should apply strict disciplinary measures, no matter the person’s position. As discussed in the FCPA Guidance, no person within an organization is too valuable to be disciplined. To avoid inherent difficulties associated with investigating senior management, it is helpful to have in place an investigations protocol, applicable to all employees and management.
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