Our Services
Program Evaluation and Improvement
We help clients evaluate and improve the effectiveness of their ethics and compliance programs to prevent misconduct from happening in the first place and reduce the prospect of catastrophic damages if it does occur.
Challenges
Companies without an effective ethics and compliance program put themselves at greater risk of misconduct, and by extension, raise their exposure to investigations and related settlements/fines (which have regularly exceeded $1 billion in recent years). These events can, in turn, trigger stock sell-offs, credit downgrades, shareholder litigation, executive turnover, and in some cases, insolvency. Individuals involved may also be more exposed to fines, compensation clawbacks, tarnished careers, and in some cases, prison sentences.
That’s why government policy requires not just having a compliance program but emphasizes the need to evaluate and improve its effectiveness over time:
The Federal Sentencing Guidelines require companies to “evaluate periodically the effectiveness of the organization's compliance and ethics program.”
The Department of Justice corporate charging policies require prosecutors to consider “whether a corporation's compliance program is merely a ‘paper program’ or whether it was designed, implemented, reviewed, and revised, as appropriate, in an effective manner.”
The DOJ’s latest guidance on evaluating compliance programs recognizes “One hallmark of an effective compliance program is its capacity to improve and evolve.” It further directs prosecutors to consider questions such as:
Evolving Updates – Has the company undertaken a gap analysis to determine if particular areas of risk are not sufficiently addressed in its policies, controls, or training? What steps has the company taken to determine whether policies/procedures/practices make sense for particular business segments/subsidiaries?
Training - Has the company evaluated the extent to which the training has an impact on employee behavior or operations?
Effectiveness of the Reporting Mechanism - Does the company take measures to test whether employees are aware of the hotline and feel comfortable using it? Does the company periodically test the effectiveness of the hotline, for example by tracking a report from start to finish?
Investigations - How has the company ensured that the investigations have been properly scoped, and were independent, objective, appropriately conducted, and properly documented?
Control Testing – What control testing has the company generally undertaken?
Culture of Compliance - How often and how does the company measure its culture of compliance? Does the company seek input from all levels of employees to determine whether they perceive senior and middle management’s commitment to compliance? What steps has the company taken in response to its measurement of the compliance culture?
Benefits
We help clients who are seeking the following types of benefits:
Satisfy program evaluation expectations established by government enforcement authorities.
Validate and memorialize the strengths associated with the program.
Identify opportunities to improve program alignment with government standards, industry benchmarks or internal business needs.
Measure compliance program impact on corporate culture, behaviors and decision-making.
Gain deeper insights of particular risk areas, operating units or geographies.
Receive unbiased feedback on program strengths and improvement opportunities.
Build internal consensus on priority needs and action plans.
Receive support from a trusted advisor with the independence, credibility, methods and resources to produce results efficiently and effectively.