Is the [Compliance] Program Being Applied Earnestly and in Good Faith?

According to the Oxford English Dictionary, “earnestly” is defined as performing something “with sincere and intense conviction”1. So, when we see the DOJ asking this question as one of its fundamental components in evaluating a corporate compliance program, we can understand that there is an expectation that compliance programs will be taken seriously and operationalized into the organization’s day-to-day operations. The existence of a compliance program doesn’t do the trick when it merely exists on paper and has never been implemented in a meaningful way. These “paper programs” are viewed by the DOJ as wholly ineffective, and not being implemented in good faith. While a paper program is easily identified, however, there are other factors affecting whether or not a compliance program may be deemed as being applied earnestly and in good faith. These other factors directly relate to the concept of a “tone at the top” within an organization, which includes the commitment of senior and middle management. The DOJ reiterates that an effective compliance program requires a high-level commitment — by way of words and actions — by senior leadership. 

Equally important and closely connected to the tone at the top is the stature and authority of the compliance officer within an organization. Compliance officers must be involved in strategic and operational discussions within an organization. Too often, we see the compliance officer uninvolved in these key discussions and decisions due to not being of the same stature as other leaders. This is a tone-at-the-top issue that directly impacts the compliance officer’s ability to adequately and effectively act on behalf of the organization it serves. It also serves to harm the organization by losing valuable compliance advice and direction to other leaders as they pursue new programs and services. 

Finally, meaningful incentives in support of compliance and consistently applied disciplinary measures are demonstrative of an earnestly applied compliance program. We frequently hear of programs where there is an inconsistent application of disciplinary action for compliance violations based upon who was involved in the compliance violation. Disparate treatment in action sets a low tone about compliance within the organization, and sends a message that compliance is important for some but not all. The effectiveness of any organization’s compliance program requires a high level of commitment to all facets of the program. Organizations that recognize the important of setting an exemplary tone at the top also understand and value the importance of compliance, and the compliance function, in their day-to-day operations. For additional information, please see our white paper Compliance Program Effectiveness.

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Contact Coker Group today for more information regarding your organization's compliance program.


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