Establishing an Effective Compliance Program: An Overview to Protecting Your Organization

Establishing an effective Compliance and Ethics Program ("Program") has become a necessity to protect any highly regulated organization. At its core, an effective Program protects an organization by detecting and preventing improper conduct and promoting adherence to the organization's legal and ethical obligations. In 1991, the U.S. Sentencing Commission established the most recognized standards for an effective Program within its Sentencing Guidelines Manual ("Guidelines"). These Guidelines are closely aligned with the principles set forth in compliance guidance that various agencies have developed over time. These include guidance related to investment companies, companies interacting with foreign officials, hospitals, nursing homes, pharmaceutical companies, and government contractors to name a few. These Guidelines and this guidance have been used by organizations to design and implement their Programs. While there is no "one-size-fits-all" Program for every organization, there are several core components that must exist to have an effective Program. These components are set forth in this article.

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