The U.S. Department of Justice (DOJ) has recently updated its Evaluation of Corporate Compliance Programs guidance for 2023, emphasizing the importance of incorporating technology, implementing third-party due diligence measures, and fostering a culture of compliance throughout the organization.
The DOJ’s guidance provides prosecutors with the standards they will use to evaluate the efficacy of corporate compliance programs during investigations and enforcement actions. Compliance officers should take note of the changes to ensure that their company’s compliance program aligns with the DOJ’s expectations.
The Importance of Technology in Compliance Programs
One of the most significant updates to the guidance is the emphasis on technology in compliance programs. The DOJ recognizes the value of technology in detecting and preventing misconduct and has recommended that companies leverage technology to analyze large amounts of data and identify potential risks.
The DOJ’s guidance cites specific examples of how companies can use technology to improve their compliance programs, including “automated monitoring, data analytics, and machine learning techniques.” By leveraging technology, companies can identify potential compliance issues before they become major problems, thereby reducing the risk of potential criminal liability.
Third-Party Due Diligence
The updated guidance also highlights the importance of third-party due diligence in mitigating risk. Companies should have appropriate due diligence policies, procedures, and controls in place that adequately address the risks presented by third-party relationships. This includes conducting appropriate due diligence on potential partners, suppliers, and other third-party relationships.
The DOJ recommends that companies implement appropriate measures to assess and monitor third-party relationships continually. Companies should also ensure that their due diligence policies and procedures are regularly reviewed and updated to reflect changes in the company’s operations and risk profile.
Fostering a Culture of Compliance
Another important update to the guidance is the emphasis on fostering a culture of compliance throughout the organization. The DOJ recognizes that a culture of compliance starts with the board of directors and senior executives setting the tone from the top.
The guidance cites specific examples of how companies can foster a culture of compliance, such as “encouraging and rewarding compliance and ethics, integrating compliance into hiring and promotion processes, and ensuring that policies and procedures are effectively communicated and understood.” By creating a culture of compliance, companies can ensure that all employees are aware of their compliance obligations and understand the importance of compliance to the organization.
The DOJ’s updated guidance for corporate compliance programs emphasizes the importance of technology, third-party due diligence, and fostering a culture of compliance. Compliance officers should review the updated guidance and ensure that their company’s compliance program incorporates these updated expectations from the DOJ.
By incorporating technology into compliance programs, companies can identify potential compliance issues before they become major problems, reducing the risk of potential criminal liability. Implementing appropriate third-party due diligence policies and procedures can help mitigate the risks presented by third-party relationships. And, fostering a culture of compliance throughout the organization can ensure that all employees understand the importance of compliance to the organization.
Compliance officers should also remember that the DOJ’s guidance is not static and will likely continue to evolve as the compliance landscape changes. Staying up to date on the latest guidance and best practices is critical to maintaining an effective compliance program that meets the DOJ’s expectations.
To learn more, you can visit:
- DOJ’s Evaluation of Corporate Compliance Programs Guidance: https://www.justice.gov/criminal-fraud/page/file/937501/download
- DOJ’s Press Release on Updated Guidance: https://www.justice.gov/opa/pr/department-justice-releases-updated-guidance-evaluating-corporate-compliance-programs
- DOJ’s FCPA Corporate Enforcement Policy: https://www.justice.gov/criminal-fraud/page/file/937501/download