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Ethics and Compliance Programs

By Alan Greenwood and Steven Lauer
September 30, 2004

A recurrent task facing Managers of Ethics and Compliance programs is to make sure their programs are effective — and demonstrate this effectiveness to both internal and external audiences.

Since management commitment and support is the fundamental requirement for effective compliance programs, it is essential for ethics and compliance officers (the United States Sentencing Commission used “ethics and compliance” in the changes that it adopted on April 8, 2004, to the Sentencing Guidelines for Organizational Defendants) to successfully demonstrate program effectiveness in order to gain trust and active support of internal audiences, such as senior management, boards of directors, board committees, internal auditors, legal staff and human resources (See ' 8B2.1(b)(2)(A)). External audiences, such as regulators and other governmental officials, the investment community and shareholders often evaluate the company based, at least in part, on its ethics and compliance plan.

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