Few things send shivers down the spines of compliance officers more than reports that one of their own has been found personally liable for wrongdoing at their organization.
And while some have tried to increase those fears, Arielle Swartz Tobin, an associate in the Dallas office of Jones Day, wants to allay them. As she explains in this podcast, most of the fears are unfounded. Individual liability is generally rare and a very low risk for compliance officers in well-established compliance programs and who are trying to get it right.
So what about these cases people see in the news? They tend, she reports, to be people who were knowingly complicit in the wrongdoing, or who had been warned of deficiencies and did not do enough to remedy them.
There is also a third category: individuals with an ostrich problem, who tend to stick their head in the sand when there is wrongdoing.
So what should a good compliance officer do? First, he or should relax. But, it’s also wise to take some precautions. For one, ensure the compliance role is scoped out and defined, especially if you are at a small organization and wearing multiple hats. Second, make sure the lines of communication are clear and that compliance-related information is getting where it needs to. Third address red flags. And, as always, document, document, document.
Listen in to learn more about the risks of individual liability and what you can do to diminish it even further.