Compliance Culture Begins with An Engaged Board

February 1, 2024

By Sarah Couture (Principal at Couture Consulting LLC in Indianapolis, IN.)

Originally Posted on: Compliance Cosmos

Compliance programs must successfully engage with a variety of stakeholders to ensure program effectiveness. Because of their fiduciary duties and oversight responsibility, compliance programs should prioritize engagement with the board of directors (or a delegated subcommittee). According to Chapter 8 of the Federal Sentencing Guidelines, the board of directors, as the organization’s governing authority, “shall be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.”[1]

How can a compliance officer effectively engage board members regarding their compliance responsibilities?

  • First, take time to get to know the board and assess what they need to fulfill their oversight responsibility. Are the board members experienced or novices? Do they understand their compliance program role? Also, gauge what level of compliance program and risk-related detail would benefit compliance reports. Some boards need or want more depth and breadth of information than other boards.
  • Second, ensure regular interaction. Industry guidance documents discuss that the compliance officer should personally provide reports to the board at least quarterly.[2] In addition, many compliance officers meet one-on-one with the board chair—often prior to an upcoming board meeting—for more extensive discussion of that quarter’s compliance matters. The compliance officer must be able to contact the chair directly without going through management. Many boards also choose to have a regular executive session with the compliance officer, without management present, regarding possible concerns.
  • Third, prioritize education and training. Ensure that board compliance education is part of your program’s overall education and training plan. In the board training, include context on the board’s role in the compliance program, your organization’s risk profile and the regulatory landscape in which you operate, and an overview of the compliance program structure and approach. Remember to include the full board—not just compliance-related subcommittees—in your compliance education plans.
  • Fourth, engage the board regarding the importance and pursuit of compliance program effectiveness. Ensure they are aware that effectiveness is the standard and what benchmarks and tools are being used to gauge effectiveness. Discuss program needs, including resource sufficiency, and update the board on program improvement plans and their implementation.

Remember, the tone at the top starts with the board of directors. It is essential that board members both understand and support compliance efforts, as a compliant culture starts with an engaged board.

1 U.S. Sentencing Commission, “2018 Chapter 8 – Sentencing of Organizations,” accessed November 11, 2023, https://www.ussc.gov/guidelines/2018-guidelines-manual/2018-chapter-8.

2 HCCA-OIG Compliance Effectiveness Roundtable, Measuring Compliance Program Effectiveness:  A Resource Guide, March 27, 2017, https://oig.hhs.gov/documents/toolkits/928/HCCA-OIG-Resource-Guide.pdf.

Copyright 2024 Compliance Today, a publication of the Health Care Compliance Association (HCCA)

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