Shifting Corporate Compliance Demands From the DOJ for 2024

The U.S. Department of Justice (DOJ) has consistently emphasized the importance of corporate compliance programs across various administrations. Recent guidance and announcements from the DOJ have underscored this focus, particularly in compensation clawbacks, evaluation of corporate compliance programs (ECCP), Mergers and Acquisitions (M&A) due diligence, sanctions compliance, and data analytics, according to an article by Navex.

The clawback pilot program introduced in March 2023 requires companies to implement compliance-related criteria in their compensation structures and report annually to the DOJ. It offers penalty reductions for full cooperation, remediation, and efforts to recoup compensation from wrongdoers. The revised ECCP includes questions on financial incentives for compliance, policies on messaging apps, and personal devices.

The DOJ’s M&A due diligence guidance offers a safe harbor for acquiring companies disclosing misconduct at target companies, subject to certain conditions. DOJ officials have also emphasized the importance of sanctions compliance and data analytics, though these are not yet formally included in compliance guidance.

However, challenges and limitations exist. Clawback policies may face legal hurdles and disproportionately affect certain executives. Messaging app and personal device policies may conflict with privacy laws and be difficult to enforce globally. The M&A due diligence guidance primarily benefits acquiring companies and may not always be feasible within specified timelines.

Recommendations for companies include assessing their specific risks and allocating resources accordingly. Implementing robust compliance policies, training employees, and monitoring violations are crucial steps. Companies should also consider incorporating national security and sanctions compliance into their risk assessments and leverage data analytics for compliance purposes.

Looking ahead to 2024, it is expected that DOJ will maintain its focus on corporate compliance, sanctions, and data analytics. Flexibility in guidance implementation to address practical challenges and continued enforcement actions highlighting these priorities are anticipated.