Background
As you have learned during the course, regulatory compliance requires constant vigilance by the board of directors, company executives, and employees. Constant vigilance, in turn, requires that all of these corporate actors be actively involved in identifying regulatory compliance requirements, designing, implementing, and continually auditing policies and procedures, and identifying and addressing compliance failures in a timely fashion.
Fact Pattern
You are the Chief Compliance Officer for ABC, Inc. (“ABC”), a publicly traded company that owns 10 hospitals across the United States, and which has over 10,000 employees. Amid frequent media stories about significant compliance issues at numerous companies, the ABC board of directors is seeking greater insight into underlying factors that may result in such failures and the role of compliance in preventing, identifying, and addressing such issues.
Questions
Please review the fact patterns below involving a lack of constant compliance vigilance by two companies (the “Compliance Cases”) and draft a memo to the board of directors of ABC, answering all of the questions below. Note: your memo should be 4 to 6 pages long.
For each Compliance Case identify two (2) compliance failures and for each identified failure answer the following questions:
Please describe one (1) policy and related procedures for each of the compliance failures (a total of 4) that you would recommend to avoid that type of compliance failure in the future.
Please discuss one (1) audit procedure for each of the compliance failures (a total of 4) that you would
recommend to avoid that type of compliance failures in the future.
For each Compliance Case, please:
Identify and discuss at least two (2) failures that occurred after the companies’ major compliance failures had been identified (“post-failure failures”)
For each post-failure failure, identify one (1) post-failure mechanism that you would recommend (a total of 4) to ensure that the board of directors has all of the relevant information so that they can act in a timely fashion.