Responsible corporate governance requires companies to implement and maintain an effective compliance program.
The program must be designed and enforced in a manner that helps prevent wrongdoing and, ensures when a transgression does occur that it is identified so that the company can respond appropriately.
When implementing a compliance program, many companies are tempted to implement "off-the-shelf" policies and training that are not customized to the particular culture and business needs of the company. Godfrey & Kahn rejects this "one size fits all" approach to compliance. Instead, our firm works with its clients to ensure that their compliance programs are organic to the company and dovetail with existing company practices and procedures.
A good compliance program also dedicates resources where the company faces the most compliance risk. Accordingly, when working with a client to improve its compliance programs, Godfrey & Kahn suggests improvements that take into account not only available resources, but also how those resources are best allocated.
Godfrey & Kahn provides compliance counseling to companies of all sizes, with a wide array of compliance needs. We frequently advise boards of directors and executives regarding the complex legal framework imposed by federal and state securities laws, including the Sarbanes Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the Securities and Exchange Commission, and stock exchange listing regulations. Our attorneys also have experience in the numerous legal regimes that might affect a compliance program, such as antitrust, labor and employment, energy, environmental, the Occupational Safety and Health Act (OSHA), political law, the Foreign Corrupt Practices Act (FCPA), and international trade.
If a violation of the law does occur, an effective compliance program could be the reason the government decides to mitigate possible penalties, or refrains from pursuing enforcement action against the company altogether. With several former prosecutors in our ranks, we have firsthand knowledge of how the government evaluates compliance programs to make this decision. Our attorneys can assess a compliance program and advise clients whether the government would conclude that the program is merely a "paper tiger" or a genuine effort supported by management to deter and to detect wrongdoing.
In advising its clients within this framework, Godfrey & Kahn concentrates on those aspects of a compliance program of most interest to government enforcers including:
- Policies and standards of conduct that are easy to understand and to enforce
- Communications and actions by company management demonstrating a "tone at the top" that encourages ethical conduct
- Compliance infrastructure designed to ensure that specific individuals have operational responsibility for the program with appropriate resources and authority
- Education and training programs and publications
- Systems to monitor the effectiveness of the compliance program
- Well-publicized reporting mechanisms (such as ethics hotlines) whereby employees can report suspected wrongdoing without fear of retribution
- Procedures to help ensure that company management finds out about compliance problems when they occur
- Protocol for responding to allegations and conducting investigations when appropriate
- Consistent enforcement of appropriate incentives and disciplinary measures
- Corrective action procedures
Many companies do not need advice in all of these areas. Accordingly, when advising a client about its compliance programs, Godfrey & Kahn listens closely to the client's needs so that we deliver results that match the client's expectations about the scope of the project. Potential aspects of a compliance project led by Godfrey & Kahn can include:
- Reviewing and revising existing policies
- Drafting new policies
- Interviewing key personnel responsible for compliance
- Interviewing targeted lower-level employees in areas facing the largest compliance risk
- Evaluating the promotion and maintenance of reporting mechanisms, such as ethics hotlines
- Assessing the effectiveness of information flow to appropriate management and board members
- Presenting a summary of strengths or weaknesses of the existing compliance program
- Suggesting improvements, with specific recommendations prioritized according to compliance risk and available resources
- Advising on how and when to report any violations uncovered during the review
Effective compliance is not only required by law, but is also good business. A good compliance program reduces risk, thereby increasing profitability. Regardless of whether a company needs help starting a compliance program from scratch or merely wants suggestions on how to refine an already robust approach, Godfrey & Kahn can help.