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.
Ethisphere’s annual “World’s Most Ethical Company” list once again demonstrates the simplistic narrative that companies resolving FCPA enforcement actions are bad or unethical. As stated by Ethisphere, the “assessment process includes more than 200 data points on culture, environmental and social practices, ethics and compliance activities, governance, diversity and initiatives to support a strong value chain.”
Like prior years, the World’s Most Ethical Company list includes several companies that have resolved FCPA enforcement actions.
- ADM
- Allianz
- Avon
- Lilly
- HP
- IBM
- Johnson Controls
- Linde
- Microsoft
- Rockwell Automation
- Schnitzer
