Compliance &Ethics - Society of Corporate Compliance and Ethics

The last wordby Joe Murphy, CCEP, CCEP-IDiscipline for “failure to takereasonable steps”: Could youfind even one example inyour company?Compliance & Ethics Professional May/June 2013MurphyThere are certain parts of the FederalSentencing Guidelines standards mostfolks seem comfortable with (e.g., codesof conduct, training, helplines). And then thereare topics that it seems almost no one is comfortablewith. One example is discipline—notmany articles or presentations on that.So here is an issue I just don’tsee discussed. The Guidelines veryclearly call for:“(B) appropriate disciplinary measuresfor… failing to take reasonable stepsto prevent or detect criminal conduct.”(emphasis added)It is right there, in black andwhite, clear as day. Our Canadian friends, intheir Competition Bureau’s guidance on complianceprograms, also say:“Proper disciplinary actions should alsobe taken against managers who fail to takereasonable steps to prevent or detect misconduct.”(emphasis added)Does your discipline meet this standard?If your company’s coverage of disciplineconsists of nothing more than routine codelanguage (“violations will result in discipline,up to and including termination”), and a recordof firing junior employees for petty theft fromthe company, then can you really argue thatyou have met the language of the guidelines?What is the message of this language?Think about it. Government believescompanies routinely engage in scapegoating.Punish the little guys so the big guys get away.The language quoted above means you can’thave an officer with subordinates runningamuck, and have that officer get off by saying“Gee, I didn’t know.” If that officer had nottaken real steps to address the risk, then theofficer must be disciplined. Taking preventivesteps is every supervisor’s job.But have you ever, in the entire life of yourprogram, done that? Do you have any exampleof a manager or officer, not directly involvedin a violation, who was nevertheless subjectto “on your watch” discipline? I suspect theseare very, very rare. And when you conductinvestigations of alleged misconduct, are yourinvestigators also looking at this issue? Do theyalways include the question, “What did theboss do to prevent this violation from happening?”Or do you routinely notify and bring intothe inner circle the boss of the person beinginvestigated, even though that person might besubject to discipline under this standard? Doesyour code warn managers and officers that thisstandard applies to them? Do line and staffmanagers know that their jobs include taking“reasonable steps to prevent or detect criminalconduct”? Perhaps we need a bit more disciplinedapproach to this topic of discipline. ✵Joe Murphy (jemurphy5730 @ gmail.com) is Of Counsel to ComplianceSystems Legal Group and Editor-in-Chief of Compliance & EthicsProfessional Magazine.76 www.corporatecompliance.org +1 952 933 4977 or 888 277 4977