The Release of Statistics on Ethics and Compliance Programs In Enforcement Decisions: A Joint Report To The DOJ

January 27, 2011

Joint ERC, ECOA, SCCE Survey Finds: “More” Information from the Department of Justice about Ethics and Compliance Programs’ Role in Enforcement Decisions is Key to Effectiveness

Survey focus:  Data from the U.S. Department of Justice from which the Compliance and Ethics Community Would Most Benefit

Washington, DC ---January 27, 2011--- Ethics and compliance practitioners seek data from the U.S. Department of Justice (DOJ) that identifies how often an effective ethics and compliance program yields a direct return in enforcement decisions, according to a survey jointly conducted by the Ethics Resource Center (ERC), Ethics & Compliance Officer Association (ECOA), and the Society of Corporate Compliance and Ethics (SCCE).

“We welcome the recent efforts by the DOJ to publicize cases where it has rewarded companies for having strong ethics and compliance programs, but the ethics and compliance community challenges the Department to take steps to be even more forthcoming with information. In an effort to help, the three leading nonprofit voices in our field joined forces to gather information and offer recommendations to the DOJ,” said Patricia J. Harned, Ph.D., President, Ethics Resource Center.

According to the survey findings, the ethics and compliance professional community would like the DOJ to provide general statistics on the consideration given ethics and compliance programs in enforcement decisions.

“Ethics and compliance practitioners need this information to demonstrate to their leadership that the United States Sentencing Guidelines Chapter 8 actually means something,” said Roy Snell, Chief Executive Officer of the Society of Corporate Compliance and Ethics. Chapter 8 of the Guidelines governs the punishment of an organization when it is found guilty of criminal conduct.  However, if the organization can demonstrate it had an effective ethics and compliance program in place, it can substantially mitigate the impending fine.

Additional data ethics and compliance practitioners would like the DOJ to make public include:

  • Descriptions—without identifying information—of individual cases in which ethics and compliance programs were a mitigating factor in enforcement decisions.
  • Information about what specific aspects of an ethics and compliance program factored into enforcement decisions.
  • Information about the benefits of an effective ethics and compliance program, such as helping avert a decision to prosecute or avoidance of other sanctions such as appointment of a monitor.

“This information is desired by ethics and compliance practitioners so that they may educate their boards of directors and management on the importance, value, and benefit ethics and compliance programs bring to companies,” said Keith Darcy, Executive Director, Ethics and Compliance Officer Association.  “That data can help business leaders see that the cost of ethics and compliance programs can be far outweighed by the benefits that they bring.”

This joint survey was conducted among the individual members of the ERC, ECOA, and the SCCE.  Membership and stakeholders of the organizations include Chief Ethics and Compliance Officers (CECOs) and other ethics and compliance practitioners.  Survey participants were asked about their use of current DOJ data, the type of additional data that would be most beneficial, and CECO interaction with their organizations’ CEOs and boards of directors. It was undertaken to support continued dialogue, inform it with empirical data, and to provide input from the ethics and compliance professional community to DOJ Acting Deputy Assistant Attorney General Greg Andres.  A full report of findings with recommendations was submitted to Andres on January 13, 2011.

Survey Background

In recent years, extensive ethics and compliance programs have become an integral part of corporate life, having grown significantly in prevalence, scope and effectiveness. Based on our research and the direct experience of our memberships, we know that the development of these programs has played a major role in building ethical cultures and promoting ethical behavior inside businesses. When well-implemented, there is evidence that ethics and compliance programs reduce misconduct and grow strong ethical cultures.

The ERC, ECOA, and the SCCE believe that, working together, the private sector ethics and compliance community and government enforcement agencies can deepen this commitment to ethical business and respect for the law by sharing information and identifying best practices in ethics and compliance.

The participation by DOJ enforcement officials at compliance and ethics forums sponsored by the ERC, ECOA, and SCCE throughout 2010 has expanded dialogue between the ethics and compliance community and government enforcement agencies. Among the areas of high interest, as identified in these discussions, is the importance given to ethics and compliance programs in prosecution and settlement decisions by government enforcement agencies.

In these forums ethics and compliance officers have urged enforcement officials to help build support for ethics and compliance through the public release of information about the mitigation benefits of strong ethics and compliance programs. Enforcement officials, in turn, want to know in greater detail how ethics and compliance officers use current DOJ data and what additional information would be most helpful.

Survey Method

Two surveys were distributed among corporate ethics and compliance practitioners; one conducted by the ERC and the SCCE, and one survey fielded among members of the ECOA. Both surveys posed a similar core set of questions; the ERC/SCCE survey contained additional questions not fielded by ECOA.

The survey was conducted from October 28 through November 30, 2010 and in total, 1,223 ethics and compliance professionals participated in the effort; a strong representation of the ethics and compliance field. More than half of the respondents (52%) indicated that they held the title of Chief Ethics and Compliance Officer or the equivalent in their organization.

For More Information

The report submitted to the DOJ (including complete survey results) may be downloaded from the following Web sites:

For interviews, media may contact:

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ETHICS AND COMPLIANCE OFFICER ASSOCIATION (ECOA)
The ECOA is a member-driven association exclusively for individuals responsible for their organization's ethics, compliance, and business conduct programs. The only organization of its kind, its members represent the largest group of ethics and compliance practitioners in the world. Through the ECOA, practicing ethics and compliance officers collectively address the tough issues they face every day. Members learn from one another and, in turn, help foster a global commitment to ethics and integrity. The ECOA can be found online at www.theecoa.org.

ETHICS RESOURCE CENTER (ERC)
The Ethics Resource Center (ERC) is a private, nonprofit organization devoted to independent research and the advancement of high ethical standards and practices in public and private institutions. For 89 years ERC has been a resource for institutions committed to a strong ethical culture.
ERC’s expertise also informs the public dialogue on ethics and ethical behavior. ERC researchers analyze current and emerging issues and produce new ideas and benchmarks that matter – for the public trust. To learn more about ERC, visit www.ethics.org.

THE SOCIETY OF CORPORATE COMPLIANCE & ETHICS (SCCE)
The Society of Corporate Compliance & Ethics (SCCE) is a non-profit membership association dedicated to improving the quality of corporate governance, compliance and ethics. We provide compliance and ethics professionals with a wide range of resources –conferences, magazines, other publications, and networking tools – to help raise the standard of the profession as a whole and to help individuals work more effectively. The SCCE can be found online at www.corporatecompliance.org.