Focusing their attention on individual accountability for corporate crime, the United States Department of Justice (DOJ) has updated its guidance on voluntary self-disclosures across each division of the DOJ tasked with prosecuting corporate crime. Signaling their united front, the Criminal Division, the United States Attorneys’ Offices, the Tax Division, the Environmental Crimes Section, and the Environment and Natural Resources Division have all released updated guidance, tailor-made to their unique mission and jurisdictions.
Background on the DOJ’s updates to corporate compliance guidance
In June of 2020, the Criminal Division of the DOJ updated its guidance on the Evaluation of Corporate Compliance Programs (ECCP). The updated ECCP guidance focused on three fundamental questions:
- Is the corporation’s compliance program well designed?
- Is the program adequately resourced and empowered to function effectively?
- Does the corporation’s compliance program work in practice?
The 2020 Update underscored the necessity for companies to develop “dynamic” compliance programs, empowered and adequately resourced to grow, able to respond to risks, and support a “culture of compliance.” This acts as the foundation for all subsequent updates, detailed below.
Value of a strong culture of compliance
So how does a company avoid having to weigh self-disclosure? Over my years working in ethics and compliance, I’ve learned the same lesson, over and over again: Culture eats compliance. If corporate culture isn’t deeply rooted in trust and ethical behavior, it doesn’t matter how “world class” your ethics and compliance program is. The DOJ is leaning into this as well. Building culture is an all-hands on deck effort. This means that everyone at a company has clarity on the mission of the company and the values to guide everyday decision-making in accomplishing that mission. In other words, how a company accomplishes its mission is a critical aspect of culture. You create engaging incentives to follow the rules. You bake-in accountability when those rules aren’t followed. Start strong and give clarity and new meaning to the hackneyed phrase, “this is the way we do it around here.”
Setting the tone from the top
When discussing individual accountability, DAG Monaco explained how that focus has paid off, “Recent charges – like those against Sam Bankman-Fried and Carlos Watson – and convictions – like those of Elizabeth Holmes and Sunny Balwani – demonstrate the Department’s resolve to take on the most challenging cases.” The DOJ message is clear, no matter your status, they will “zealously pursue corporate crime in any industry,” and “will hold wrongdoers accountable, no matter how prominent or powerful they are.” In other words, “that’s the way we do it around here” does not happen unless it is coming from the top.
Setting the tone from the top and cultivating a culture of trust means making every interaction, both at the micro and macro level, an opportunity for executives to demonstrate the company’s commitment to building trust. Just like representation matters, seeing ethical behavior in action can make it feel more accessible and even aspirational. When senior leadership demonstrates a strong commitment to ethical behavior and accountability, employees are more likely to act in the same way and are more likely to speak up if they observe misconduct or potential violations of the law.
