Revisions to Federal Sentencing Guidelines Approved

April 20, 2010 – In The News
Compliance Week

On April 7, the U.S. Sentencing Commission approved changes to the Federal Sentencing Guidelines to strengthen to the chief compliance officer. The guidelines have provided for what corporations should do to have an "effective" ethics and compliance program that is in line with the law, thus evolving the guidelines into a de facto blueprint for how companies should structure their compliance function.

The Commission has clarified "direct reporting obligations" and that an effective program will entail a regular process for reporting to the board. This could complicate the roles of chief compliance officers, as many companies think they meet the standards, when in fact they do not, said Joseph Murphy, director of public policy for the Society of Corporate Compliance & Ethics.

Patrick Egan agreed, saying compliance officers' reporting authority "is an area where we still see a lot of pushback," especially from smaller companies.