Research Paper on "Corporate Compliance Plan"

Research Paper 6 pages (1654 words) Sources: 3 Style: APA

[EXCERPT] . . . .

Corporate Compliance Plan for General

Commercial Construction Company

This work examines the 'Corporate Compliance Plan' and specifically in relation to the General Commercial Construction company engaging in business. Corporate compliance includes adherence to external legal requirements which includes environmental, financial, employee and product safety requirements as well as other health and safety regulations. The United States Sentencing Commission in 1991, adopted Organizational Sentencing Guidelines which affect the effect that these criminal sentencing sanctions would likely have on businesses and corporation and findings show that these guidelines offer very convincing incentives for compliance programs to be put into place and for violations, upon their discovery, to be reported.

ELEMENTS of a SUCCESSFUL COMPLIANCE PROGRAM

The work entitled: "Fighting Global Corruption: Business Risk Management" published by the Bureau for International Narcotics and Law Enforcement Affairs states that an effective compliance program "...is one that ultimately yields intended results: education, detection, and deterrence." (2001) the following are stated to be general elements typically found in compliance programs that are successful:

Full support of upper management. It is crucial that all of the elements of your company's corporate compliance program receive the full support of upper management.: (a) the corporate compliance program must be enforced at all levels within the company.; and (b) if upper level management does not take efforts to combat corruption seriously, then neither will employees.



Establish and adhere to a written corporate code of conduct. Corporate directors, officers, employees, and agents put themselves at risk of incurring criminal or civil liability when they do not adhere to the FCPA or similar anticorruption laws of other countries. A corporate code of conduct generally consists of a clearly written set of legal and ethical guidelines for employees to follow' (a) a comprehensive and clearly articulated code of conduct -- as well as clear policies and procedures relative to seeking guidance and making disclosures -- may reduce the likelihood of actionable misconduct by your employees; (b) it is important that a company's code of conduct be distributed to everyone in the company and, if necessary, translated into the languages of the countries abroad where your company operates.; and - Finally, developing a code of conduct should not be the final act. The code must be effectively implemented and enforced at all times.

Establish an organizational compliance structure. A compliance program may be run by one person or a team of compliance or ethics officers, depending on the size of your business.: (a) Implementation and responsibility for a corporate compliance program by high-level management employees are vital for accountability; (b) Corporate compliance officers and committees can play key roles in drafting codes of conduct and educating and training employees on compliance procedures. Committee compliance members may include senior vice presidents for marketing and sales, auditing, operations, human resources, and other key offices; - Past experience has shown that empowering compliance officers with access to senior members of management and with the capacity to influence overall company policy on integrity issues can be of utmost importance.

Provide anticorruption training and education seminars. The overall success of a compliance program depends on promoting legal and ethics training at every level of the company. (a) Regular ethics and compliance training programs should be held for all company employees, (b) including board members and senior management officials; - Compliance programs should educate employees at all levels of the company about the FCPA and, when necessary, other countries' anticorruption laws; (e) More specific legal and ethical training may be necessary for employees in high-risk areas (f) a company should also take reasonable measures to communicate its values and procedures in an open environment to encourage participation and feedback; (g) Employees should be informed as to whom they should contact to report violations or ask questions; (h) Training materials which are both interactive and cost effective can help build employee support for a compliance program; and (i) Most importantly, compliance issues should not be limited to training classes and the compliance team: compliance should be stressed as an integral part of the company's way of doing business.

Undertake due diligence. Conducting prompt and thorough due diligence reviews is vital for ensuring that a compliance program is efficient and effective. Due diligence reviews are also key for preventing potential harm to the company's reputation. (a) Self-monitoring, monitoring of suppliers, and reports to the Board of Directors are all good tools for ensuring that a compliance program is being followed; and (b) Moreover, from vetting new hires, agents, or business partners to assessing risks in international business dealings (e.g., mergers, acquisitions, or joint ventures), due diligence reviews can uncover questionable conduct and limit liability.

Auditing and internal accounting controls. Auditing and monitoring of systems of internal accounting controls contribute toward building an effective compliance program by the early detection of inaccuracies and misconduct (e.g., bribery, fraud, or other corporate malfeasance). Financial disclosure and reporting should be an integral part of a company's internal accounting controls: (a) Companies should have a clear and concise accounting policy that prohibits off-the-books accounts or inadequately identified transactions; and (b) Companies should monitor their accounts for inaccuracies and for ambiguous or deceptive bookkeeping entries that may disguise illegal bribery payments made by or on behalf of a company. The FCPA requires compliance with various accounting and record-keeping provisions.

Compliance mechanisms. Enforcement of a company's code of conduct is critical. Compliance officers should be accessible so that employees will feel comfortable discussing any of their compliance questions or concerns: (a) Creating reporting mechanisms with adequate policies on confidentiality and non-retaliation as well as other safeguards related to reporting is extremely important; and (b) Whistleblowing protections, suggestion boxes, or "Helplines" facilitate detection and reporting of questionable conduct. (Bureau for International Narcotics and Law Enforcement Affairs, 2001)

It is additionally related that companies should make the provision of guidance towards assisting employees and agents on coping with and resolving situations which are difficult." (Bureau for International Narcotics and Law Enforcement Affairs, 2001) Additionally, the company should "ensure that all employees understand the failure to comply with its compliance policy and procedures will result in disciplinary action, ranging from minor sanctions to more severe punishment, including termination of employment. In instances of non-compliance, a company should take the necessary preventive steps to ensure that the questionable conduct does not recur in the future." (Bureau for International Narcotics and Law Enforcement Affairs, 2001)

II. LEGAL CONSIDERATIONS for COMPLIANCE PLAN

The work of Thomas Matthews entitled: "Developing a Company Ethics Program" states that reason to formalize a corporate compliance and ethic program include the legal considerations of:

Avoidance of spending time and money.

Mitigation of fines and penalties.

The proposed Sentencing Guidelines which require, among other things, an effective compliance and ethics program, and an emphasis on the creation and maintenance of a "corporate culture of ethical compliance." The benefits of establishing a compliance program include avoidance of prosecution and/or the mitigation of fines and other penalties for federal criminal offenses.

Compliance with laws and regulations.

Deterrence of class action complaints.

Prevention of criminal charges altogether.

Economic Considerations

An effective C&E program may prevent reputational harm and a broad range of harm to business operations from preventable legal matters (e.g., loss of customers, suppliers, and alliance to plaintiffs; increased regulatory scrutiny; and diversion of management attention).

C&E program helps a company to avoid corporate scandals (e.g., Enron, WorldCom, Qwest, Adelphia, HealthSouth).

External auditors take into account a company's compliance culture when rendering their (a) audited financial statements, and (b) internal controls.

Insurance companies consider having an effective compliance and ethics program as a factor in providing company insurance coverage and pricing insurance premiums for directors' and officers' insurance policies

According to the work of Peckar & Abramson entitled: 'Contracting with Federal Funds? You need a Compliance Program" (2007) elements of a successful compliance… READ MORE

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