Cross Industry Cross Compliance - Governance, Risk, and Compliance Topic for Oracle Applications - page 340

Under the Federal Sentencing Guidelines, an effective compliance and ethics
program is one that is intended "to achieve reasonable prevention and detection
of criminal conduct". Maintaining an effective program can help a company to:
• Avoid prosecution
• Advocate for a nonprosecution or deferred prosecution agreement
• Mitigate the penalty imposed
It also has benefits in civil and administrative litigation.
Standards for an effective compliance
and ethics program
In order to be effective, the program must be both documented and demonstrably
pervasive inside the corporation. Under the guidelines, in order to have an effective
program, the company must, at a minimum, adhere to the following:
• Establish standards and procedures to prevent and detect criminal conduct
• Ensure that the governing authority (most often, the Board of Directors) and
all high-level personnel exercise oversight with respect to the implementation
and effectiveness of the program
• Exclude from positions of substantial authority any individual that the
company knows, or should know, is engaged in illegal or unethical activities
• Conduct training on and disseminate information about the program's
standards and procedures
• Monitor, audit, and evaluate the program, as well as provide a mechanism
for anonymous or confidential reporting
• Promote and enforce the program through appropriate incentives and
disciplinary measures
• Respond appropriately to criminal conduct that is detected and act to prevent
further similar conduct
The recent amendments stress that responding appropriately includes taking
steps to provide restitution or remediate harm if there is an identifiable victim or
victims, as well as self-reporting, cooperating with authorities, or undertaking other
remediation. These are important steps in the civil arena as well. The amendments
also add that to prevent further criminal conduct after learning of misconduct, the
company should take steps to assess risk and enhance the compliance and
ethics program.