Purchase Tom Reid's Books here:

At a recent Chamber meeting an attorney was talking about revised corporate sentencing guidelines. There’s no way my company can do everything he was discussing. Should I care?

CCS offers the following from our Chief Problem Solver, Tom Reid:

The short answer is “yes,” but please remember that the sentencing guidelines are a very legalistic matter and should be reviewed with competent legal counsel if you have any specific questions.

But speaking generally, even small businesses should be concerned. In effect the sentencing guidelines suggest ways in which a company can avoid or minimize the sanctions when found guilty of a criminal offense. Under the guidelines, a small business is defined as one with less than 200 employees. While the guidelines recognize that smaller companies might not be able to put all of the safeguards in place that a larger company can (such as having “high level personnel” dedicated solely to ensuring compliance), the guidelines still expect compliance. This includes that the “governing authority” needs to directly manage the compliance and ethics program of the company, training employees on ethics and compliance matters, observing employees’ behaviors, and modeling its compliance and ethics programs on the “best practices” that larger companies have developed.

While no company ever expects to get in trouble with the law, it sometimes happens. Actions of some employees can be imputed to the company and can result in criminal convictions of the individual and the company. A solid ethics and compliance program goes a long way toward insulating the company from those individuals’ actions, if not preventing them in the first place.

In the words of the U.S. Sentencing Guidelines Manual, “Small organizations shall demonstrate the same degree of commitment to ethical conduct and compliance with the law as large organizations.”

So what can you do to demonstrate compliance? First, conduct regular risk assessments of your operations. While it can be done using internal personnel, an outside perspective is often very helpful. Second, conduct regular training and awareness activities on ethics and compliance. To effectively do this, publish your policies and procedures on ethical and compliance expectations and make every employee document their awareness of them.

Finally, make ethical conduct part of your culture. This is a constant and on-going effort that must begin with the highest levels of the organization. Those of you who may be or seek to become publicly traded, these same actions will assist you in complying with Sarbanes-Oxley Act as well. If you require any assistance in discussing these actions further, or in preparing a plan to conduct a proper risk assessment, call on CCS to help. We are experienced in policy development, training, and risk assessments.

Unless Congress acts between now and November, the guidelines as presently published will become final.

NOTE: CCS is not authorized to practice law or accounting. This information should not be relied on in any particular facts you may have without checking with a properly licensed professional.