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FCPA Violators Are Among The Best-Managed Companies


In the minds of some, companies that have resolved Foreign Corrupt Practices Act enforcement actions are bad or unethical companies.

It is a tempting position to take. After all, the FCPA is about bribery and corruption.

However, it is a wrong position to take in many (but certainly not all) instances.

It surprises most people to learn that a company with pre-existing FCPA compliance policies and procedures – and a company otherwise making good faith efforts to comply with the FCPA –  can still face legal liability when a non-executive employee or agent nevertheless acts contrary to the company’s pre-existing FCPA compliance and procedures.

And rightfully so.

Yet because of respondeat superior principles or the government’s seeming strict liability approach to enforcing the FCPA’s books and records and internal controls provisions, the company is exposed to FCPA liability.   Such pre-existing policies and procedures may be relevant to charging decisions or the type of resolution vehicle under DOJ / SEC non-binding policy or guidance as well as the ultimate fine amount under the advisory Sentencing Guidelines, but not relevant to liability as a matter of law.

The Management Top 250, an annual ranking based on the principles of the late management guru Peter Drucker, once again demonstrates the simplistic narrative that companies resolving FCPA enforcement actions are bad or unethical.

The ranking includes five main components: customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength.

Among the Top 30 are several companies that have resolved FCPA enforcement actions:

  • Microsoft
  • IBM
  • Johnson & Johnson
  • HP Inc.
  • Lockheed Martin
  • General Electric
  • Oracle
  • JPMorgan Chase

For previous similar posts, see herehere and here regarding Ethisphere’s “World’s Most Ethical Companies List,” this post highlighting how FCPA violators have been well-represented on Fortune’s “Most Admired Companies” list and this post for how such companies are well-represented on Fortune’s “Changing the World” list.



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