Compliance Program Development Guidelines

 In Articles, Business, Compliance

An effective anti-competitive behavior compliance program should expand and improve competition law compliance through business policies, procedures, controls and training designed to satisfy governmental requirements. This post provides an outline of policies, processes, controls and training that would form a program for a typical large company with a number of different businesses worldwide.

The Program will include at least the following components. And efficient online and face-to–face training of all relevant people and job functions. An automated tracking process to simplify progress audits. The program must include checklists and reference manuals available in print for employees without ready access to computers. A “dawn raid” and subpoena delivery process, procedures and instructions. Approval process and procedures for a competitor/trade association meetings. A mergers and acquisitions due diligence process. A plan for the monitoring and the audit of program’s overall process effectiveness. And an onboarding process for new hires and acquisition employees.

The ultimate goal for this program is zero violations of competition laws or regulations. The guiding principles on which the program is developed are aligned with applicable U.S. law to ensure compliance with applicable competition laws and regulations. The program should a gap analysis of the “as is” and desired states.  The program must reflect an enterprise-wide commitment to ethical conduct, transparency, and compliance with the company ethics policy as well as with any and all applicable laws and regulations in the countries where the company does business. The policies must be accessible and consistently applied throughout the enterprise and across all geographies. The program must be consistent with corporate values such as sustainability, efficiency, quality and so on. The program should be aligned with key performance indicators facilitate efficient audit and evaluation.

The Program must be effectively designed and implemented to comply with all applicable regulatory requirements in the countries that we do business. The program must effectively reflect “tone-at-the-top” about compliance, integrity, and fairness in all aspects of the business, whether internal or external to the company. The program must incorporate periodic assessment of risk (by business unit and region) and corresponding procedures for the mitigation of any risk. The program must aim to prevent anti-competitive behavior. It must also anticipate the possibility of human error and therefore include early detection of disallowed behavior that escaped the program. This would include all unfair business practices proscribed by applicable competition laws in the countries that the company does business. The program must provide practical, user-friendly processes for the reporting potential violations.

To be considered successful, the program must deliver at least the following. A training program with materials and schedules tailored for the target audience in each region and business unit. The specific identification of job functions across the enterprise and across regions which should receive priority for training. Systems for the automatic enrollment of employees (including new hires, promotions, and employees thru acquisition. The system must track participation and content. The program must also provide behavior checklists for industry meetings, sales calls and for employees working away from the office for whatever reason.

The program needs to provide a specific process with checklists for employees who may be present at a “Dawn Raid” or subpoena service. The process must be introduced globally with either live or web-based communication and training, tailored by region for language and content. The program must include a process to assure employee contacts with competitors are appropriate. This includes approval or reporting procedures for trade association meetings and other meetings with competitors. Training, instructions, tracking and verification.

With regard to mergers and acquisitions activity, the program must assure due diligence. This means the development and implementation of a reliable process to assure due diligence on all M&A activity. This will include due diligence checklists incorporating legal risks, regulatory risks and risks associated with filing requirements. The due diligence process must also incorporate steps to prevent the business unit from sidestepping the due diligence process out of urgency to close the deal.

The program must incorporate built-in monitoring and auditing, including analysis of transactions. The audit process must also include training materials and activity. Sales, marketing, and strategic planning must also be subject to audit as determined by the compliance committee.

The program must be developed in accordance with a project plan. This will begin with the identification of the project team and executive sponsor. The program must allow for adequate staffing both in the business units as well as shared services units such as legal and finance. The program must include specific and periodic “tone-at-the-top” messaging.