Unless you give careful thought to corporate compliance and governance issues, the way you do business may be putting you and your company at risk. Today, even such seemingly innocuous actions as making a phone call or comment, setting a company policy, or providing guidance to subsidiaries can constitute dangerous behavior for companies and officers. The attorneys of the Corporate Compliance Group at Dickie, McCamey & Chilcote are leaders in the corporate governance field. We are uniquely positioned to offer practical counsel and solutions because we have been on the front lines of major compliance and governance matters.
Determining Corporate Governance Status
No matter what the legal relationship between a parent company and its subsidiary, their functional relationship may determine parental liability. The Corporate Compliance Group evaluates the existing corporate governance structure by reviewing documents, conducting interviews and analyzing legal relationships to determine if there are functional relationships that may place the parent company at risk.
Determining Director Liability
As a result of the 1996 Caremark decision, corporate directors can be held personally liable to stockholders when a corporation's criminal activities and fines result in a dramatic decline in stock value or cause other significant financial losses. The Corporate Compliance Group evaluates officers' roles within the governance structure to identify areas of vulnerability and establish strategies to protect directors from shareholder lawsuits.
Applying the Responsible Corporate Officer Doctrine
Under the Responsible Corporate Officer Doctrine, anyone — from managers to chief compliance officers — who directly or indirectly supervises an employee who has violated the law, also may be held liable for that employee's actions. To identify liabilities and minimize the risk of an enforcement action, the Corporate Compliance Group analyzes all reporting structures, supervisory mechanisms, budgets and training programs.
Conducting Legal and Compliance Audits
Every organization is subject to clearly defined and substantial penalties for violations of federal law. To help reduce vulnerability, the Corporate Compliance Group conducts legal audits that identify all laws applying to the company. The Group then analyzes the existing compliance program to determine (1) if, in fact, that program helps prevent and detect violations of those laws, and (2) where improvements are required.
Developing and Implementing Compliance Programs
The best way to prevent and detect violations of law is to implement an effective corporate compliance program. Should accidents or illegal activity occur, proof of an effective compliance program may result in leniency in the courtroom and in subsequent financial and criminal penalties. The Corporate Compliance Group helps create compliance programs that define ethical and legal policies and outline compliance standards expected from all employees. These programs also include well-articulated policies and standards, effective training programs, and monitoring and enforcement mechanisms.
CONDUCTING INTERNAL INVESTIGATIONS
If illegal or unethical behavior is alleged, the willingness to conduct internal investigations can strongly support a courtroom defense. Since it is difficult for companies to avoid the appearance of a biased internal investigation, the Corporate Compliance Group can conduct the investigation, provide a report and bring in private investigators when necessary.
Though sound corporate compliance programs can reduce liability in even the most difficult circumstances, skillful legal representation assures the fullest protection possible under the law. The Corporate Compliance Group's attorneys have specific experience in corporate governance and compliance and can provide strong representation in administrative, civil and criminal matters.