Melissa Anderson – Agenda-A Financial Times Service – June 1, 2015
Government investigators can spot a weak compliance program easily, according to officials at the SEC and Department of Justice. A “paper program,” as weak compliance programs are commonly known, could merit a harsher penalty if the company is investigated by the regulators.
Common red flags include a program that shifts blame from senior executives to low-level employees, an underfunded or underutilized compliance department, and a compliance function without the power to say no to business deals, officials say. Boards can help their companies avoid regulatory scrutiny by addressing these red flags and ensuring that their compliance process works in real life, and not just on paper.
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