What is a Compliance and Ethics Program?

The United States Sentencing Commission defines an effective compliance and ethics program as a program designed to assure compliance with applicable legal requirements with mechanisms to prevent, detect, and correct violations and wrongdoings within an organization.

Federal Sentencing Guidelines Elements

1. Program Structure and Oversight

Program oversight by high-level management with adequate resources and authority given to those responsible for the program and demonstrate due care regarding individuals to whom substantial discretionary program authority is delegated.

2. Policies and Procedures

Appropriate standards and procedures to prevent and detect misconduct, issues and concerns.

3. Training and Education

Effective communications and training of the standards, policies and procedures, and other aspects of the compliance program.

4. Auditing and Monitoring

Effective monitoring, auditing and evaluation of the compliance and ethics program and established procedures /practices to ensure compliance.

5. Allegations Reporting and Investigation

Publicize a Hotline system that allows for anonymity and confidentiality, whereby employees and agents may report or seek guidance regarding potential or actual issues without fear of retaliation.

6. Discipline and Incentives

Promote and enforce the compliance and ethics program consistently through appropriate incentives to perform in accordance with the compliance program, along with appropriate disciplinary measures for engaging in inappropriate conduct, or for failing to take reasonable steps to prevent or detect wrongdoing.

7. Enterprise Risk Management

Take reasonable steps to respond appropriately to wrongdoing and criminal conduct once detected to prevent further similar conduct, which includes making any necessary modifications to the compliance and ethics program.  A periodic risk assessment should also be undertaken with appropriate changes made to the compliance and ethics program.

8. Organizational Culture

Promote an organizational culture that encourages ethical conduct and commitment to compliance with the law.