“I’m shocked, shocked to find that gambling is going on here,” is the famous line by Casablanca’s Captain Renault that might best describe the way senior management feels when corporate misconduct is discovered at their company. Because criminal liability may attach to an organization whenever an employee commits an act within the apparent scope of his or her employment, many companies are exposed to huge amounts of liability for the acts of but one, potentially rogue employee. But prosecutors and regulators, both in the United States and abroad, have been increasingly making it clear that being “shocked” to learn of corporate misconduct by a rogue employee is no defense. What will be of assistance to the defense of the company is a thoughtful, comprehensive, and effective compliance program that can induce prosecutors and other regulators to often significantly reduce the applicable fine and sometimes even decline to bring charges in the first place if an organization’s program is well thought out and designed to handle real-life business risks.

Most notably and instructive is the DOJ’s recent compliance guidance, released in April 2019, giving prosecutors a framework for evaluating the effectiveness of corporate compliance programs. This also gives companies instruction on how to proactively organize their compliance programs within the framework of what the DOJ expects. In the wake of increased guidance from regulators, companies should expect much less sympathy when they fail to implement programs and policies according to that guidance.

Benefits of Compliance