The US Department of Justice has recently updated their criteria for the evaluation of corporate compliance programs. The new updates are in line with a trend we have seen in other parts of the regulatory framework – a shift towards evaluating compliance programs instead of simply evaluating compliance performance. There was recently a joint statement released by federal regulators which encouraged a focus on improving the compliance framework itself, and now we see that the DOJ has taken a similar stance. In their new guidance document they outline 3 fundamental questions that will be considered during an evaluation:

Question 1 – Is the corporation’s compliance program well designed?

The first question that is asked is about the design of the compliance framework of a business. Note that there is an important distinction that needs to be made about compliance performance and compliance programs. Compliance performance can be affected by employee dedication – if they put in hard work, they will achieve better results. However, the results they can achieve are limited by the design of the compliance program. If the compliance program is ineffective or non-existent it significantly reduces the capabilities of the compliance framework.

Business that employ manual compliance management practices have a tough time demonstrating that their compliance program is well designed. Their compliance data is spread across many different computers, their communication spread across multiple email threads, and they have no automated monitoring system available. Compliance management technology gives the compliance program a structure. Every process is streamlines and made visible. Federal regulators and agencies can quickly assess the extent and efficiency of the compliance program.

Question 2 – Is the program being applied earnestly and in good faith? In other words, is the program being implemented effectively?

The 1st question looks at the design of the compliance program. However, having the right compliance program design is only a part of the puzzle. It also needs to be applied and implemented effectively. This means that businesses need to have an established electronic trail. They need to be able to demonstrate that their employees followed the processes outlined in their compliance program. It takes a lot of work to be able to present all this evidence

Businesses that employ workflow automation and robotic process automation in their compliance program will not need to worry about this question at all. Their compliance management system creates electronic trails of all actions taken by default. If the workflow is automated then the process is being followed as lined out in the compliance program of the business by design.

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Question 3 – Does the corporation’s compliance program work in practice?

The first question talks about the design of the compliance program, the second one focuses on how it is implemented, and the final fundamental question outlined by the DOJ focuses on the results of the compliance program. This is an area which most businesses will be comfortable dealing with, as it has been the focus of regulatory bodies and agencies for a long time. This is where the business shows their success rate and effectiveness in numbers.

These three questions are easier to answer if you use a compliance management solution. These solutions codify your compliance management framework. Instead of a vague network of people who communicate and collaborate using whatever off-the-shelf software they have access to, compliance management solutions create a properly structured compliance management framework. We will not be surprised if it becomes necessary for businesses to have such a structured program in place in a few years, because it allows federal regulators and agencies to easily assess corporate compliance programs.

Want to see how your organization’s compliance management framework can be improved with the help of compliance management technology? Get in touch with the 360factors team for a demo and a trial of the American Bankers Association endorsed Predict360 Compliance Management System.