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Matt Kelly (LinkedIn), Editor and CEO at Radical Compliance is a close watcher of all things compliance, and in this podcast he shares his take on both the top stories of 2023 and what he sees in the cards for 2024.
FCPA
On the Foreign Corrupt Practices Act front, he noted a change in enforcement. While the volume of resolutions declined on the DOJ side, the SEC has remained very active.
Perhaps most notably, the Albermarle case had an interesting twist. The way the company did business was changed dramatically as a part of the settlement, he reports, with a restructuring of its overseas sales and the end of the use of third parties. He speculates this may be the start of a new trend in which monetary penalties are accompanied by required changes to the way companies do business.
Also of note in FCPA was the announcement by Lisa Monaco at the SCCE Compliance & Ethics Institute of a leniency policy in mergers and acquisitions. Because of the relatively short timeline for finding and disclosing problems, there is a strong incentive for organizations to involve the compliance team early and deeply in these transactions.
SEC Cybersecurity Rules
The July SEC rules on disclosures of cyber incidents require firms to disclose an incident within four days. Companies will need to describe the nature, timing and material consequences. That will increase the importance of thorough and prompt cyber materiality assessments, as well as both quantitative and qualitative impacts.
Greenhouse Gas Disclosures
The SEC’s proposed rule on greenhouse gas disclosures is now the longest and most commented rule in history. It also has not been finalized while, in the meantime, both California and Europe have passed their own laws.
The rule is likely to be very complex and impose a significant burden on companies.
Healthcare
The biggest news he saw in 2023 was the new General Compliance Program Guidance issued by the Office of Inspector General at HHS. The document makes it clear that it expects a fully independent compliance program. As the document states:
The compliance officer should:
- report either to the CEO with direct and independent access to the board or to the board directly;
- have sufficient stature within the entity to interact as an equal of other senior leaders of the entity;
- demonstrate unimpeachable integrity, good judgment, assertiveness, an approachable demeanor, and the ability to elicit the respect and trust of entity employees; and
- have sufficient funding, resources, and staff to operate a compliance program capable of identifying, preventing, mitigating, and remediating the entity’s compliance risks.
The Future
Looking to the future he asks if others will be as supportive as the OIG at HHS.
He also points to other things to watch such as the Foreign Extortion Prevention Act, the PCAOB’s extremely controversial NOCLAR proposal and SEC v. Govil, which could eliminate disgorgement in many cases.
Listen in to learn more about what has and may happen in the world of compliance.