Let’s face it: Whether it’s the perceived cost, the reputational risk, or the potential distraction and other impacts it will have on day-to-day business operations and employees, most organizations groan at the thought of a monitor.
The question remains: how can companies avoid facing a monitorship altogether?
In a podcast with Sidley Austin and the Environmental Law Institute, Brad Wilson and Michele Edwards highlight their experience working on some of the largest and most high-profile monitorships in history, and what companies can learn about investing in compliance. Though the panel highlights environmental monitorships in their commentary, the lessons learned are applicable across monitorships stemming from other types of misconduct and also provide takeaways of how companies should proactively invest in compliance. While ensuring an effective compliance program can feel like an overwhelming undertaking, as the old adage says, an ounce of prevention is worth a pound of cure.
Where can compliance professionals begin?
All organizations can take actionable steps to assess and gain confidence that their compliance program is effective, and in the event something does go wrong, and when facing scrutiny, be armed to demonstrate to the Department of Justice (DOJ), prosecutors and other regulators that the compliance program and the remedial actions that have been taken are appropriate and effective.
Tailor to the Risks
Prove not only that a compliance program is based on a robust risk assessment, but that the program is appropriately tailored and continuously enhanced to address the identified risks. With respect to remediation, perform a root cause analysis to dig deeper into what went wrong and tailor the remedial actions to prevent or timely detect recurrence.
Evaluating Human Capital and Culture
Ensure the program is adequately staffed, resourced, and supported, that there is a culture of compliance throughout the organization; and when something has gone wrong, don’t underestimate assessing the cultural root causes and amount of time it takes to remediate cultural issues.
Committing to Regular Testing
Demonstrate the program and remediation taken has been tested and is implemented effectively to mitigate risks now and in the long-term.
At the end of the day, communication and transparency are key. By examining guidance from the DOJ and also learning from lessons of monitorships past, companies can more swiftly and effectively take steps to proactively build an effective compliance program and begin to remediate their missteps before they are scrutinized by regulators, prosecutors and the market at large.