It’s been a year since I wrote about The Board’s Overlooked Role in Compliance. At the time, it seemed that momentum was building for more proactive board engagement in establishing and overseeing compliance programs. After all, regulators and courts have been increasingly outspoken about the importance of effective compliance programs and pointed about the essential role of boards of directors. Deputy Attorney General Rod Rosenstein recently addressed that very topic at Compliance Week’s 2018 Annual Conference for Risk Professionals in Washington, D.C. During his remarks, Mr. Rosenstein emphasized the need for companies to design, implement, and maintain effective enterprise-wide compliance programs, highlighting both the positives of success and negatives of failure.
Yet many companies still are not taking the necessary steps, and boards of directors may be partly to blame. For example, although the director panelists at Compliance Week 2018 consistently and emphatically supported the concept of effective ethics and compliance programs, they generally fell short of acknowledging the board’s affirmative duty to proactively oversee the process. The focus was instead on the now venerable (and perhaps overused) “tone from the top” concept, with some speakers seeming to take the view that proper board oversight consists of ensuring that the company hires capable personnel and then receiving periodic reports about any known compliance glitches. Continue Reading