Chapter 2: Foundational Materials and Program Infrastructure

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The History of the Organizational Sentencing Guidelines and the Emergence of Effective Compliance and Ethics Programs

On November 1, 1991, the Federal Sentencing Guidelines for Organizations (found in “Chapter Eight: Sentencing of Organizations” in the U.S. Sentencing Guidelines Manual) went into effect. The United States Sentencing Commission (hereinafter referred to as the Commission or the USSC) promulgated the original set of organizational guidelines after several years of study, and the organizational guidelines have been amended comprehensively only twice in their 28-year history. [2]

This paper traces the historical development of the organizational guidelines, with particular emphasis on the development of organizational sentencing policy relating to effective compliance and ethics programs. The “carrot and stick” philosophy that undergirds the organizational guidelines rests on the realization that corporations can, and should, be incentivized to self-police, and with respect to compliance and ethics, the organizational guidelines have ushered in an unprecedented era of corporate responsibility. Moreover, over time, compliance programs have had an impact that extends well beyond the criminal justice arena. A fundamental understanding of the historical development of the organizational guidelines not only provides a foundation for the consideration of future changes to those guidelines, it also aids organizations in the adoption of standards for effective compliance and ethics programs.

Part I of this paper provides a brief discussion of the events leading to the creation of the USSC and its statutory mandates from Congress. Parts II, III, and IV document three distinct stages in the USSC’s efforts to promulgate the initial set of organizational guidelines. Part V discusses the events leading to the comprehensive guideline changes made to Chapter Eight in 2004, including the elevation of the criteria for an effective compliance and ethics program from the commentary into a separate guideline. Part VI discusses the next set of comprehensive changes made in 2010. Finally, Part VII summarizes the organizational guidelines’ impact outside the criminal justice arena.

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