"How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part Two of Three)"The FCPA Report
In this article, Kathryn Cameron Atkinson discusses different FCPA reporting requirements being developed by companies in response to settlements. Hybrid monitorship, in which a company is under a traditional monitorship for the first eighteen month followed by eighteen months of a self-monitorship, is one example of these new agreements. "I think the challenge of the hybrid monitorships will be that it's almost like asking a three-year monitor to do his or her work in eighteen months," Atkinson said. "In a complex organization, if the company's program is at its earlier stages when a monitor arrives, it is difficult to do it in three years. The sophistication level of the program when the monitor shows up is the biggest driver in terms of what a monitor really needs. The less well-developed the program is, the harder it is to do it quickly. If you have to design and roll out significant program components, then you are going to need time for them to take root in the company before you can really test them," Atkinson explained.
Companies that hope to work with the government on less restrictive reporting requirements should begin to develop an acceptable agreement well before they sit down with the government to discuss the terms. According to Atkinson, negotiation "doesn't start when we are at resolution, it starts the day we come in." She continued, "It is not uncommon to have a conversation about the compliance program in the first meeting with the government. Certainly, it would come up relatively early on." In those conversations, we would identify "what we had in place at the time the issues arose," describe "what we have done already in response," and outline the remainder of "our remediation response," she said.
After a settlement agreement is reached, it is important sufficient resources be dedicated to selecting appropriate monitor candidates. Atkinson said, "once a monitor is in place, if the company has chosen poorly and if it has not done its homework on whether they are going to be responsible stewards of the company's money, it is very difficult to unseat or rein in the monitor."