Good Ethics Is Good Business

An organization's commitment to the specifics of its own compliance program and training plan can yield meaningful benefits. One study found that every extra dollar allocated to an organization's compliance budget "decreased damages, settlements and fines by $1.37" on average. Another found that organizations investing an above-average amount on training would have returned 45% more than the S&P 500 index during the period studied.

Preventing and Detecting Improper Conduct

The primary objectives of a compliance program are to (i) prevent and detect misconduct and (ii) ensure that an organization conducts its activities in compliance with all applicable laws, regulations and rules. Key to the success of the program is that employees know and understand these legal requirements and respond appropriately if and when problems arise.

By developing a training plan that helps employees understand the laws and policies that apply to them, an organization demonstrates its commitment to furthering the objectives of its compliance program. Active enforcement of that training plan could well determine how – or whether – law-enforcement authorities pursue a claim of wrongdoing against the organization and/or its officers and employees.

Defenses to Liability

Having policies and procedures that go unread and unheeded can be riskier than having none at all. An organization's policies can provide prosecutors and plaintiffs' attorneys with a road map to standards that were set but not met and, from there, to inferences of liability. Having a written record that employees received training on, demonstrated an understanding of, and agreed to abide by all applicable policies and procedures can only help your organization's cause.

Mitigation under the Federal Sentencing Guidelines

The Federal Sentencing Guidelines provide a powerful incentive for organizations to develop a compliance program that includes employee training. The guidelines include mitigating factors that can substantially reduce an organization's fines and penalties – in some cases up to 90%. Among the most important mitigating factors is whether the organization has an effective compliance program in place. One of the seven elements of an effective compliance program specified by the guidelines is that the organization should communicate and train all employees and agents in the compliance program.