Compliance Training Keeping Compliance Training Programs Up To Date

Tuesday, June 1, 2004 - 00:00

The Editor interviews Kirk S. Jordan, Vice President, Integrity Research Group, Integrity Interactive Corporation.

Editor: How does your group help corporations update their compliance training programs to reflect the U.S. Sentencing Commission's recent revisions to the sentencing guidelines?

Consistent with Integrity Research's ongoing efforts to anticipate likely changes in the legal environment, our training programs already reflect many of the changes that will take effect when the revised sentencing guidelines go into effect. The focus of each program is to provide the training needed to help a corporation demonstrate its due diligence to prevent and detect criminal conduct.

Editor: Please put the revised guidelines into context.

Set up by Congress, the U.S. Sentencing Commission is charged with the promulgation of both the individual and organizational sentencing guidelines. What we're concerned with here are the organizational sentencing guidelines, which apply to business organizations that have been convicted of listed offenses. The original guidelines adopted in 1991 provided for mitigation of the penalties applicable to companies that adopt and implement compliance programs reflecting the framework described in the guidelines. Throughout the 1990s, companies used the sentencing guidelines' framework to determine what should be in their compliance manuals.

About two years ago, the commission appointed an Ad Hoc Advisory Committee to make recommendations based on the ten years of experience under the original framework. Last fall, the committee delivered its report to the commission, which in May adopted many of the committee's recommendations and actually went a couple of steps further.

The commission's revisions, which include some very substantial changes to the original framework, go into effect on November 1st unless Congress acts to stop them.

Editor: Is Congress likely to act?

No. Congress will probably allow the revisions to go into effect, which is always what previously has happened when the commission put other recommendations before them.

Editor: What are the most important changes in the revised guidelines?

The revisions require companies to promote an organizational culture that encourages ethical conduct and commitment to compliance to the law - starting at the top. The organization's governing authority, which in most cases means a board of directors, must be knowledgeable about the content and operation of the compliance and ethics program and must exercise "reasonable oversight" with respect to its operation.

Editor: Why the greater emphasis on "ethics"?

Throughout the nineties most people used the term "compliance programs." Now people talk about "ethics and compliance programs." The revised guidelines use this term in response to the growing recognition that compliance failures reflect a failure on the part of companies to maintain an ethical environment from the top down. I don't think it changes the substance of what the guidelines seek to accomplish. They apply only to criminal misconduct. Criminal misconduct undoubtedly reflects an ethical failure, but in every case grows out of a compliance failure.

Editor: Do your compliance training programs reflect a top down commitment to compliance with law?

We give our corporate clients a number of opportunities for their top executives and even their board to put their imprints on their training programs. For example, each company's home page typically features a picture of the CEO or the president along with a specific and personal message about the company's commitment to ethical values and importance of compliance with law. In addition, employees are enrolled in the courses by e-mail initiated with a cover note from a senior individual in the company to further demonstrate senior management's commitment to compliance.

Editor: Do the revised guidelines require that the company's leadership be kept advised of the compliance program's implementation?

Yes, they require that the individuals who have been assigned day-to-day responsibility for the compliance and ethics program report periodically to senior management or the board on the operation of the program. Companies that use our training programs are in a position to respond easily to this requirement. Records of employees' participation are stored in a way that enables detailed reports to be prepared on the company's progress in the deployment of its compliance training programs. In the past, those reports have often been used by our clients to demonstrate to their boards the significant progress that they are making in employee compliance training and can now be used to fulfill the reporting requirement of the revised guidelines.

Editor: What are some of the characteristics of an organization's culture that encourage commitment by employees to compliance with law and ethical conduct?

From experience, we know companies need to make employees aware of their legal and ethical responsibilities. A fair amount of misconduct occurs simply because employees have not been sensitized to compliance issues. Our clients have told us that one of the most effective and powerful benefits of Integrity Interactive Web-based training is that employees' awareness is substantially raised - not only about compliance issues, but also the internal resources available to them, such as lawyers, helplines, and codes of conduct and other policy documents.

With our help, internal resources can be marshaled to enable employees to get their questions answered before they step over the line. Our clients have told us that our training programs have had a powerful and positive effect on their organizational culture.

Another important characteristic is a sense of openness - of management being willing to listen and respond to the issues raised by employees. That can be done through a helpline system that employees can use to report problems and ask questions without fear of retribution.

Editor: What are some elements of effective compliance training?

Effective training starts with determining which employees are most exposed to compliance issues by reason of their jobs. Employees such as those in sales, marketing, and management often present the greatest risk from an ethics and compliance perspective. We help companies assess which employees are most likely to be confronted by compliance issues and to determine which training courses those employees should take based on their job unctions.

A salesperson would typically take a course in antitrust and fair competition, but the actual course would depend on where they are located and the laws they are subject to. In the U.S., it may be a basic course on antitrust and contact with competitors. In Europe, we would recommend our EU competition law training course. We also offer a generic global competition law training course for employees whose sales activities have a global reach.

Once the assessment has been done, the next step is to implement a process to enroll in, and take the courses. We do that with a unique e-mail enrollment program that drives employees to the courses one at a time. This creates a high completion rate. Our target employees will come back and take a second course in the curriculum because we designed a relevant and engaging course. They are story-based to drive home the key points and mindful of employees' time by allowing them to complete the courses at their convenience.

Editor: Does your helpline system have online as well as telephone capabilities?

Yes. Integrity Interactive has developed a system called the Integrity WebLineSM, which is integrated with our training, for employees to ask questions about compliance issues or if they want to report problems anonymously. The sentencing guidelines have an implicit requirement for companies to have a helpline. The revised guidelines make it clear an effective program must include a telephone or Web-based system, which must be publicized and allow for anonymity or confidentiality where the employees may report or seek guidance regarding potential or actual criminal conduct without fear of retaliation. This is in addition to a similar requirement in Sarbanes-Oxley.