Compliance Program Must Match Firm's Growth

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By Yin Wilczek

Oct. 8 — The failure to expand compliance programs when companies grow is an “overarching theme” driving many of the recent compliance problems flagged by the Department of Justice, a senior official said Oct. 7.

“At a minimum, expanding corporations must extend their compliance programs to all of their subsidiaries,” especially those that were recently acquired, said Marshall Miller, Principal Deputy Assistant Attorney General for the DOJ's Criminal Division. In addition, companies must “ensure that all compliance policies are understood and implemented by all employees, no matter what country they work in,” Miller said.

Miller spoke at the Practising Law Institute's Advanced Compliance and Ethics Workshop.

Filip Factors.

Under the Principles of Federal Prosecution of Business Organizations, or Filip factors, the DOJ must consider the existence and effectiveness of a company's compliance program as one factor in deciding whether to charge the company.

Miller said good corporate compliance program have three hallmarks:

  • they set the right tone at the top;
  •  they keep pace with corporate growth; and
  •  they provide for strong enforcement and discipline.

To illustrate his point, Miller cited, among other examples, the DOJ's prosecution in November 2013 of Swiss oil and natural gas company Weatherford International Ltd. under the Foreign Corrupt Practices Act for bribing officials in the Middle East and Africa . The company agreed to enter into a deferred prosecution agreement and to pay more than $87 million to settle the charges.

Among other shortcomings, Weatherford—despite its global presence—didn't translate its compliance policy into languages other than English, Miller said. The company also admitted that before 2008, it had no dedicated compliance officer or compliance personnel, and didn't undertake anti-corruption training.

The Weatherford case is a “stark example of a problem that we're seeing more and more frequently: the failure of a compliance program to bridge the geographic divides and cultural gaps exposed by global corporate expansion,” Miller said.

Wrong Tone.

The DOJ official also cited the case involving BNP Paribas SA. In July, the French bank pleaded guilty to violating U.S. economic sanctions and agreed to pay a record $8.97 billion to resolve related state and federal probes. High-ranking BNP officials had ignored warnings that the company was running afoul of U.S. sanctions, telling compliance officers that the illegal transactions had the “full support” of BNP management in Paris, Miller noted.

“The BNPP case is thus not a simple story of a poor compliance policy, but a more complex tale of leadership failure and institutional greed,” he said.

A good compliance program must have the ability to uncover corporate misconduct and the individual wrongdoers, even on a global scale, Miller said. “A compliance program's ability to uncover wrongdoing and the responsible individuals, coupled with a corporation's decision to disclose that information to the government, is significant in our evaluation of the compliance program and the company's overall posture with the government,” he said.

To contact the reporter on this story: Yin Wilczek in Washington at

To contact the editor responsible for this story: Mike Moore at

The text of Miller's speech is available at

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