Where I Think the Yates DOJ Memo Will Take Us

By Roy Snell
roy.snell@corporatecompliance.org

In the past, organizations were able to privately discipline leadership, without scrutiny as to the appropriateness of the discipline. But imagine what future DOJ meetings with company leadership will look like…

On one side of the room will be top leadership; on the other, the lead investigators. The DOJ may ask that the Board Chair be involved. At some point during the meeting, the DOJ will share their recent memo/policy that, paraphrased, states, “If you turn over internal investigations of individuals involved in the alleged wrongdoing, you will get more credit.” (“More credit” is a euphemism for, in some cases, millions of dollars in reduced penalties.) But beyond the discussion of credit, leadership will need to be prepared for a discussion of discipline.

Here are some possible responses to the DOJ’s offer to “get credit” by disclosing the internal investigations of individuals:

• We have done nothing wrong; there is nothing to share.
• Yes, there was a problem; we respectfully decline to share our investigations.
• Yes, there was a problem; we will share our investigations, but we have not disciplined the individuals involved.
• Yes, there was a problem; we would like to get credit and reduce our penalty; here are our investigations, and we have disciplined the individuals involved in a manner that you will find to be credible and adequate.

Will it be possible to “get credit” without immediately enacting “adequate” discipline? I don’t think so.

What brought me to this observation was recent news about top leadership being fired. (In one case, the CEO, COO, CFO, and head of HR were all fired.) It seems to me that lately, there have been more news stories about leadership discipline, and I wondered if this might be connected to the new DOJ policy. Connected or not, I realized that the new policy could have a profound impact on discipline. Did this cross the DOJ’s mind as they were drafting the policy?

When I was a compliance officer, I considered it my job to help leadership when people were pushing them to the edge—or over the edge—of the law. I felt I was effective at keeping them out of trouble. I had specific conversations with them about how questionable decisions would affect them personally. They appreciated it. They respected it.

Is it possible that leadership will now look at their compliance officer in an entirely different way? I think it is inevitable.

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