Corporate Compliance, Ltd.
Answers to Frequently Asked Questions

What is a corporate compliance program?
Why does my organization need one?
What potential penalties do companies face
What makes a compliance program effective?
What compliance mechanisms exist?

What is a corporate compliance program?

A corporate compliance program is a system which isdesigned to detect and prevent violations of law by the agents, employees, officers and directors of a business.

Although we use the general term "corporate compliance",the need for an effective compliance program is not limited to corporations. Any form of business entity is well served by having an effective compliance program.

Why does my organization need one?

In 1991, the federal government enacted the Organizational Sentencing Guidelines (Chapter 8 of the Federal Sentencing Guidelines), in an effort to make the penaltiesfor corporate crime both uniform and predictable, so as to encourage "good corporate citizenship".

Penalties under the guidelines include fines and imprisonment, as well as "corporate probation", which is mandatory in the case of a businesswhich does not have an effective compliance program in place. Probation involves intrusive federal monitoring of the organization and adoption of a government authored compliance program, which can be far more expensive and invasive than a voluntary compliance program could have been.

The Guidelines take a carrot and stick approach in order to encourage businesses to police themselves. Each crime or violation is assigned a base fine, which is either increased or decreased based upon the presence of certain aggravating and mitigating factors. One such mitigating factor is the existence of an effectivecorporate compliance program.

Under the Guidelines, an organization which has such a program may receive a substantially reduced fine, and maybe able to avoid corporate probation andcriminal prosecution altogether.

What Are the Potential Penalties Companies Face?

Among the penalties which apply to organizations are:
  • prison
  • fines
  • restitution
  • sanctions
  • forfeiture
  • corporate probation.

What Makes A Compliance Program Effective?

The 7 Steps.

What Compliance Mechanisms Exist?

There are compliance mechanisms which correspond to each of the "7 Steps" of compliance due diligence.

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Corporate Compliance, Ltd.
152 Kentview Drive
Carmel, NY 10512
Telephone: (845)225-6822
Fax: (845)225-3930

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Text copyright 1997 by William J. Richmond and Michele C. Petitt. Graphics copyright March 1997 by Michele C. Petitt and the Village Web Smiths. The Fraud Detector is a Trademark of Corporate Compliance, Ltd. The Anvil and Keyboard Logo is a Trademark of The Village Web Smiths.
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