Elements of an Effective Compliance Program

Chapter 8 of the Federal Sentencing Guidelines (the “Guidelines”) provides guidance and direction for establishing and maintaining an effective ethics and compliance program.  The Guidelines prescribe two overarching requirements:

  1. An organization “shall exercise due diligence to prevent and detect criminal conduct;” and
  2. An organization “shall otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.”

The Guidelines also identify seven essential elements for effective ethics and compliance programs.  The compliance profession has refined those elements to better define how they work in practice.   

Standards of conduct, policies and procedures

  • The organization must establish clear guidance to facilitate compliance

Oversight and accountability

  • Appropriate senior leadership must oversee the compliance program, with one specific executive given overall responsibility

Education, communication and awareness

  • The organization must ensure its members are aware of the compliance program and their compliance obligations

Delegation of authority

  • The organization should only delegate authority to those who will act consistent with the organization’s best interests, which includes compliance with applicable law and policy

Enforcement, discipline and incentives

  • The organization must ensure its members abide by their compliance obligations

Monitoring and auditing and risk assessment

  • The organization must have systems in place to evaluate compliance

Ongoing program improvements

  • The compliance program must evolve as the risks confronting the organization change

 

The essential elements outlined above are the foundation for the University’s Ethics and Compliance Program.  For a description of the University Ethics and Compliance Office activities associated with each element, please see the Our Compliance Program web page.

The essential elements listed above are drawn from the Complete Compliance and Ethics Manual 2015.