Practical Compliance
Board of Directors Oversight of Compliance Programs

What should be the involvement of the Board of Directors in implementation of compliance programs?

The Board is responsible for risk oversight and ensuring that that company has effective mechanisms for implementation of an effectively functioning compliance program, including making sure that adequate resources are allocated to the compliance function at the company.  The Board (or if appropriate, a designated committee of the Board) has to review with the management the risks that the company faces, define responsibilities for risk oversight, and establish monitoring and reporting mechanisms. 

Directors should be asking questions as to whether the company’s compliance program is well-designed, well-implemented, and has the resources needed to properly function. To that end, the management has to provide periodic updates on those issues to the Board. We recommend that the Board (or its designated committee) has regular scheduled compliance-related meetings at least on an annual basis and has separate meetings, should any specific compliance issues arise in the interim. It is also important to establish a record of the Board’s involvement in the oversight of risk management and compliance at the Company.

*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice.  You should contact your attorney to obtain advice with respect to any particular legal matter.  You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.    
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