Scales of justice with a businessperson holding a balloon rising under one side of the scales

Sometimes, organizations break the law. When that happens, courts look to sentencing guidelines to determine how to punish the illegal action. The Federal Sentencing Guidelines for Organizations provide that guidance, but also offer “Seven Pillars” for an effective ethics and compliance program to keep businesses out of trouble.

Examples

The European Union Privacy Shield

The Privacy Shield Frameworks are a mechanism for legally transferring personal data from the European Union (EU) and Switzerland to…

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Ethics and compliance programs have many advantages

Many businesses have no formal ethics or compliance program. These organizations may see such a program as unnecessary or high-cost.…

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Enron: scandal leads to regulation

How one company's fall from grace prompted new standards Much has been written (and filmed) about the Enron scandal. Enron's…

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Practical Guidance

Better Business Bureau Code of Advertising

Read about the BBB's standards for honest and fair business ads These basic advertising standards are issued for the guidance of advertisers, advertising agencies and advertising media. It is impossible to cover fully the wide variety of advertising practices by specific standards in a code such as this, which is designed to apply to the offering of all goods and services in all forms of media. Note: To learn more about each standard, click on "Click here for specifics" to read the entire text for that item (on the BBB website). BBB Code of Advertising - Summary Each section of…

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Intro to the Federal Sentencing Guidelines for Organizations

The Federal Sentencing Commission sets standards for sentencing for federal crimes. Because companies can also break the law, the Commission also developed guidelines for how to sentence organizations: the Federal Sentencing Guidelines for Organizations (FSGO). Companies can face penalties from fines to operational requirements. But the most talked-about portion of the FSGO is what it says about compliance programs. If an organization has an effective compliance program, then it will face reduced consequences in an enforcement action. What's an effective compliance program? The FSGO outlines what you need. Your company should have standards and procedures in place, such as a…

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Business and the federal courts

What happens when a business breaks the law? In many cases, a regulatory violation results in a fine or some additional penalties, such as increased oversight. But some cases are large enough that the company involved is brought before a federal judge and sentenced. Obviously, a business can't go to jail. But sometimes, individual executives or directors are involved in wrongdoing so deeply that those individuals are criminally prosecuted for their roles. Famously, several Enron executives were sentenced to prison for their part in defrauding shareholders. Enron then collapsed under its financial burdens. In most cases, the business does not…

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Why companies need to recognize differences between compliance and ethics

Q: Are compliance and ethics really that different? A: I would argue that compliance and ethics are unique disciplines; however, because both are designed to manage human behavior, it is easy to see why the two are so often conjoined. First, many organizations "house" their ethics departments under the larger compliance umbrella. Companies do this for a number of logical reasons, including fiscal efficiency and employee shared competence. Thus, organizations developed socially constructed departments such as the Office of Compliance and Ethics as well as formal titles such as chief compliance and ethics officer. Second, natural intersection points for compliance and…

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