In the post-Enron/WorldCom era corporate compliance has once
again become a hot topic. Compliance is not new for highway contractors.
Contractors certify many things and interact with a wide variety of
governmental agencies. Similar to what occurred after the bid-rigging scandals,
governmental scrutiny will increase because of a loss of trust.
So, my question to contractors is: Do you have a corporate
compliance program designed to avoid purposeful or inadvertent violations of
law by your employees?
In 1991, after defense contractor scandals, the U.S.
Sentencing Commission issued sentencing guidelines for corporations. For a corporate
compliance program to be effective, the guidelines provide it must, as a
minimum, include the following elements:
* Reasonable compliance standards;
* Effective oversight of program;
* Due care in delegating authority;
* Communication to employees;
* Enforcement of program;
* Consistent enforcement; and
* Periodic review of program.
What are the potential issues facing highway contractors? I
see at least the following:
* False claims;
* OSHA/safety and health;
* DOT (commercial driver's licenses);
* Procurement and government contracting;
* Finance and tax; and
Each of these areas is guided by specific statutory law or
by guidelines published by the pertinent regulatory agencies. It is important
to understand the law and the regulations in each of the areas of the compliance program and to develop a code of
conduct for each area.
Keeping current is obviously a concern. For example, a
couple of years ago the U.S. DOT revised the DBE regulations. The U.S. DOT
issued new rules with respect to commercial driver's licenses that may have
broad applicability to trucking.
The structure or organization is a key component of whether
a company is truly abiding by its compliance program. The highest level of
management must propose the standards for them to have legitimacy within the
corporation. Next, a high-level person or persons must be responsible for
Many different examples of the structure have been used, and
no strict rules determine how the program must be set up. Some firms have
compliance committees, others a compliance officer who both has the respect of
the employees and the clout to deal with those who may create a problem. The
individual should answer directly to the CEO of the company or a committee of
the board. This individual may be called an ombudsman or an ethics officer.
Either way, this individual is an absolute necessity in the compliance program. style="mso-spacerun: yes">
Any compliance officers or committees should be formally
designated as such by the highest level of management. Formal acknowledgement
affirms the company's commitment and lends credibility to the structure. To
carry out their duties, these individuals must have and understand a manual outlining
how to carry out the program.
If a problem ever arises, the government agency is likely to
look at the relationship of the contractor's efforts to comply and how the
problem occurred. In this context paper compliance programs may be worse than
not having a compliance program. If employees at the appropriate level do not
know of or understand the compliance program, then the contractor has not taken
compliance seriously. As a result, contractors must ensure their employees are
well trained. That may be no small effort.
Finally, there must be accountability. Obviously,
contractors hope they will have no problems. Using the program in their
decision making is one way to anticipate and avoid problems. Reviewing and
auditing activities in each of the risk areas is essential. Additionally,
violations of law or ethics must be identified, investigated and
Over the next several months and years, corporations will be
placed under a higher degree of scrutiny than before. With a strong compliance
program, contractors can take steps to avoid willful or inadvertent violations
of law or regulations by their employees.