Deputy Attorney General Rod Rosenstein Discusses Compliance Program Effectiveness

The embattled U.S. Deputy Attorney General Rod Rosenstein recently spoke to compliance pros at the 2018 Annual Conference for Compliance and Risk Professionals.  Bulleted below are some of the statements from his keynote speech, which evidence the view from near the top of the Department of Justice:

  • As to what it means to have a culture of compliance, he gave details: “Employees should be trained and encouraged to think about compliance issues in making business decisions.”  “In a company with an effective and adequate compliance program, the legal, compliance, and audit departments are not the only repositories of professionals monitoring and evaluating what the business does.  “Compliance should not be treated as separate and distinct from other business goals.”
  • He emphasized the importance of “precision” and “close reading,” as “the future of a business may turn on a seemingly minor detail.  Obsessing over details is part of our job.”
  • He stressed the societal implications, for example: “Our society cannot permanently endure” without “the fiduciary principle,” “the principle of trusteeship.”
  • He talked about fiscal value: “When a company creates and fosters a culture of compliance, it creates value.  Compliance is an investment.” Compliance “makes companies more valuable and less likely to encounter unanticipated costs that may result from protracted investigations and penalties.”
  • He gave the “two principal questions” the DOJ asks about a company’s compliance function, when that company comes under investigation, essentially, what was the state of the compliance function at the time of the conduct; and what is its current state, after remediation.

As part of SEC exam readiness, we often recommend additional and direct outreach from the CCO to firm owners, other C-Suite executives, and senior management, including, for example, providing reading material for insight into regulators. Consider passing this speech up the chain or to other management members.

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