by Michael Connor
Corporate ethics and compliance officers want the U.S. Department of Justice to provide data “that identifies how often an effective ethics and compliance program yields a direct return in enforcement decisions,” according to three leading professional organizations.
In a letter to the Department of Justice (DOJ), the three organizations – the Ethics Resource Center (ERC), Ethics & Compliance Officer Association (ECOA), and the Society of Corporate Compliance and Ethics (SCCE) – said that recent surveys of 1,223 ethics and compliance officers indicate “disappointment” with DOJ statements on past cases which linked favorable treatment for offenders to their cooperation with investigators yet ignored the value of existing ethics and compliance programs.
“This information is desired by ethics and compliance practitioners so that they may educate their boards of directors and management on the importance, value, and benefit ethics and compliance programs bring to companies,” said Keith Darcy, Executive Director, Ethics and Compliance Officer Association. “That data can help business leaders see that the cost of ethics and compliance programs can be far outweighed by the benefits that they bring.”
“Ethics and compliance practitioners need this information to demonstrate to their leadership that the United States Sentencing Guidelines Chapter 8 actually means something,” said Roy Snell, Chief Executive Officer of the Society of Corporate Compliance and Ethics.
Chapter 8 of the Guidelines governs the punishment of an organization when it is found guilty of criminal conduct. However, the measure provides that the “prior diligence of an organization in seeking to prevent and detect criminal conduct has a direct bearing on the appropriate penalties and probation terms for the organization if it is convicted and sentenced for a criminal offense.”
The organizations said the additional data they would like the DOJ to make public include:
- Descriptions—without identifying information—of individual cases in which ethics and compliance programs were a mitigating factor in enforcement decisions.
- Information about what specific aspects of an ethics and compliance program factored into enforcement decisions.
- Information about the benefits of an effective ethics and compliance program, such as helping avert a decision to prosecute or avoidance of other sanctions such as appointment of a monitor.
The survey results forwarded to the Justice Department noted that information about federal enforcement is often included in board presentations to reinforce the importance of corporate compliance. The survey cited the comment of one chief ethics and compliance officer: “All corporate departments compete for scarce resources, and it is sometimes difficult to prove the business case for dollars that support robust programs. All boards of directors know that it’s ‘the right thing to do’ but we still have to justify our existence just as much as R&D, Sales, etc. Hard facts help.”
“Ethics and compliance officers almost unanimously agree that it would be beneficial if DOJ case information specifically included statistics about the consideration of (ethics and compliance) programs in enforcement decisions,” the survey reported.
Further, the survey said, “it would be helpful if the DOJ made a distinction between cases in which an organization received credit for an (ethics and compliance) program that was in place prior to an offense (i.e., pre-existing programs) and those in which companies were credited for…programs initiated only after the offense took place.”