In an article for Compliance and Ethics Professional® (CEP) magazine, Bass, Berry & Sims attorneys Lindsey Fetzer and Thad McBride examined recent enforcement actions under the Foreign Corrupt Practices Act (FCPA) and the recent focus on individual enforcement and individual compensation. The authors also provide practical suggestions for managing the compliance landscape.
Since the release of the Yates Memo in 2015, the Department of Justice (DOJ) has focused on individual accountability as a way to monitor misconduct under the FCPA. In 2023, DOJ announced a three-year Pilot Program which “consists of two principal initiatives: compliance changes to corporate resolutions and deferred fine reductions for employee compensation recouped by a company.”
With the continued focus on individual accountability and the launch of the Pilot Program, Lindsey and Thad offer four factors for companies to keep in mind related to employee compensation packages:
- Compliance-centered compensation arrangements should be prioritized for positions with the most exposure to potential violations.
- Companies should look to implement compensation structures that reward and incentivize compliant behavior.
- Companies must not hesitate to design penalties into compensation structures.
- Compliance efforts should be fully integrated into an organization’s corporate functions.
As the authors note, “Updating compliance programs to reflect DOJ priorities will both make for a more effective program and help reduce penalties if a violation occurs.”
The full article, “FCPA Update: Recent Enforcement, DOJ Clawback Program,” was published in the August 2023 issue of CEP Magazine and is available online.