Earlier this month, DLA Piper released the results of the firm’s first annual compliance survey. The survey results demonstrate that CCOs are worried about personal liability and that companies are still struggling with monitoring and auditing their compliance programs. The survey provides CCOs with guidance that aims to protect their companies as well as themselves and all of the individuals tasked with developing and implementing compliance programs. The anxiety felt by many of the survey’s respondents is likely related to concerns and goals articulated in the “Yates Memo” as well as the appointment of Hui Chen as the Justice Department’s first-ever compliance counsel.
In the Yates Memo, U.S. Deputy Attorney General Sally Q. Yates, surmised that “One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.” As a result of the Memo, and the appointment of Hui Chen, more than eight in ten respondents to the survey said that they were at least somewhat concerned about the change in tone and tactics from Washington.
One concern expressed by survey respondents is the potential for the industry’s talent pool to be drained due to the reality of heightened personal liability and stunted resources. Ninety-one percent of respondents predicted that CCOs and compliance programs will now face greater scrutiny due to the developments in Washington. In addition, almost two-thirds said the recent changes would affect their decisions to remain or accept positions as CCOs.
The survey offers a glimpse into the current state of compliance at both public and private companies. For example, the survey highlights monitoring as being the weakest aspect of the overwhelming majority of respondents’ compliance programs. The survey also illuminates the lack of penalties for those employees who fail to complete compliance training or certifications at more than half of the respondents’ companies. CCOs are provided with recommendations regarding fundamental steps they should take related to mitigating CCO risk, training, cyber-insurance, CCO reporting, monitoring, regular risk assessment and reporting to the Board of Directors.
If you are a CCO, CLO or GC responsible for any aspect of your company’s compliance program, DLA Piper’s first annual compliance survey is a must-read. You will undoubtedly identify one or more strategies which can be utilized to strengthen and increase the effectiveness of your company’s compliance program.
About Red Oak Compliance Solutions
Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.