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Recent DOJ compliance policy makes the case for proactive monitoring

Eric R. Feldman (efeldman@affiliatedmonitors.com) is Senior Vice President and Managing Director of Corporate Ethics & Compliance Programs for Affiliated Monitors Inc. in Los Angeles, California, USA.

On June 1, 2020, the Department of Justice (DOJ), without any fanfare, quietly slipped out its 2020 revision of the Evaluation of Corporate Compliance Programs guidance.[1] As with its predecessors in 2017 and 2019, this update further refines the DOJ’s guidance to companies about how often they should review the structure of their ethics and compliance programs, the importance of a compliance officer’s access to data, and greater clarity on how companies should integrate mergers and acquisitions into their existing programs and corporate culture.

This third installment of the guidance underscores why and how law enforcement pays such close attention to a company’s ethics, compliance, and anti-fraud activities. Since early 2017, the DOJ has clarified its previously nebulous position on the value of proactive compliance efforts by introducing a series of memos and additions to the Justice Manual aimed to answer the following questions:

  • What do government regulators expect a company’s ethics and compliance programs to look like?

  • What steps can companies take before an ethical failure, or between the time of an offense and resolution, to structure (or remediate) ethics, compliance, and anti-fraud activities in a manner that will help mitigate the consequences of enforcement actions?

  • How can a company determine whether its ethics and compliance activities are having the intended impact?

While government guidance provides insight into the potential value of strong ethics and compliance programs when resolving enforcement matters, the DOJ or other government agencies do not proactively evaluate a company’s ethics and compliance posture unless that company is under investigation. So how then do companies determine the sufficiency of their ethics and compliance activities?

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