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ARCHIVED WEBINAR :: Ethics and Compliance - A View from the US Sentencing Commission
Kathleen Cooper Grilli, Deputy General Counsel in the Office of General Counsel
Joel A. Rogers, VP Ethics, Compliance & Content Strategy
Few people have had a closer look at the impact of ethics – or the lack of ethics – on corporations and other organizations than Kathleen Cooper Grilli, Deputy General Counsel to the US Sentencing Commission. In an April 16, 2009 webinar hosted by UL EduNeering, Ms. Grilli discussed key points that are taken into consideration by the Commission in their guidance regarding the sentencing of organizations for compliance and ethics violations.
The US Sentencing Commission is an independent agency within the US Department of Justice, with members appointed by the President, confirmed by the US Senate, and charged with establishing guidelines for the prosecution of criminal and civil cases. Chapter 8 of the Commission’s Organizational Guidelines reflects the goal of providing a “structural foundation from which an organization may self-police its own conduct through an effective compliance and ethics program.”
Ms. Grilli emphasized what appears to be an inverse relationship between an organization’s effective compliance program and the criminal liability carried by the organization itself when it experiences compliance violations. “We’ve seen only a handful of companies with effective compliance programs that were prosecuted by the Department of Justice.” This fact is attributable in large part, she suggested, to separate guidance issued by the DOJ cataloguing factors – including robust ethics and compliance programs – to be considered when deciding whether to seek indictment against an organization itself. This guidance can be found in documents originally known as the Thompson and McNulty Memoranda.
An effective compliance program imposes two overriding requirements on organizations. First, they must exercise due diligence to prevent and detect criminal conduct. Second, they must promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.
The size and scope of a compliance program depends on each organization and its risk of violation. “Ethical behavior is about more than compliance,” said Grilli. It’s about an organizational culture that has ethics as a core principle. Pointing out the well-known compliance program developed by Enron, Grilli explained that no compliance program can function in a climate of distrust and fear.
Creating an ethical culture requires commitment and resources, but it also delivers practical results. The most obvious benefit is avoiding the costs associated with litigation and conviction for criminal or civil crimes. Fines and settlements can run into the millions of dollars, often including the cost of an external auditor to monitor corporate actions during probation periods. Less obvious but equally compelling is the cost of an unethical workforce to the company, its shareholders and the public at large. The question isn’t whether or not to comply, noted Grilli. “Are we going to teach only what we have to for compliance? Or” she asks, “are we going to teach ethics as something bigger – something that is woven into the organization’s culture?”
About Kathleen Cooper Grilli:
Kathleen Cooper Grilli, Deputy General Counsel in the Office of General Counsel, has been on the staff of the U.S. Sentencing Commission, Washington, D.C. since November, 2003. She provides legal advice to the Commissioners and drafts briefs, reports and memoranda on sentencing issues and other matters relating to the operation of the Commission. Ms. Grilli has chaired interdisciplinary policy teams involving the sentencing guidelines for transportation, and intellectual property, disaster fraud, and identity theft cases. Ms. Grilli represents the Commission at training programs about the sentencing guidelines.
Prior to working for the Sentencing Commission, Ms. Grilli was with the Office of Staff Counsel for the Fourth Circuit Court of Appeals. Before relocating to Virginia, Ms. Grilli was in private practice in Fort Lauderdale, Florida. From 1990 through 1996, she was an Assistant Federal Public Defender in the Southern District of Florida. Ms. Grilli was also employed as an associate at several firms practicing in the area of commercial litigation. Ms. Grilli is a member of the Bars of Florida and Virginia. She received her undergraduate degree from Florida International University in 1984 and her law degree from the University of Miami School of Law in 1987.