Wall Street Journal Quotes Manatt Partner on Importance of CIOs in FCPA Compliance Programs
"Anti-Corruption Law Puts Onus on CIOs"
The Wall Street Journal
November 14, 2012 - The Wall Street Journal quoted Manatt's Jacqueline Wolff, co-chair of the firm's Corporate Investigations & White Collar Defense Practice, on how chief information officers can play an important role when it comes to helping their organizations avoid prosecution for violating the Foreign Corrupt Practices Act.
The Wall Street Journal reports that the U.S. Department of Justice and the Securities Exchange Commission recently issued a 130-page document, providing clarification to portions of the Foreign Corrupt Practices Act that critics called ambiguous. The memo provides pragmatic advice, including hypothetical questions and examples of how companies can avoid prosecution.
Wolff said that the government is less likely to prosecute companies that have created programs that identify potential areas of risk (such as third-party consultants overseas), have executed such programs in good faith, and ensured that programs are effective.
"Putting together a program that is risk-based is often done with IT," said Wolff. "Some of the most effective programs involve working with IT to figure out how you can assess risk by creating buckets of risk areas, tracking those areas, tracking corrective steps, and then assessing whether incidents go up or down," she said.
Wolff emphasized the idea that companies need to do more than have a program in place, but have to ensure that the program is actually effective. Chief compliance officers should rely on CIOs to put these programs in place "because CIOs can understand the tool and how it works or how to fix or revise it to be more effective," she said.
But even the best applications won't be effective unless leadership makes its policies clear to all employees, including those who reside abroad, or are foreign nationals. "Corporate culture is the starting place. If it doesn't support compliance, the technology isn't going to accomplish much," said Wolff.