I. ASSIGNMENT OVERVIEW
What is compliance?
You will have a solid answer to this question once you complete this assignment. Until then, start with the basics. Virtually all business activities conducted in the United States are regulated, not only by governmental entities, but by professional entities as well. Compliance with all federal, state, and local laws and ordinances is a prerequisite to the long term health and survival of any business. And compliance with industry and professional practice standards can be equally important, especially when mandated for accreditation and government contracts qualification.
Certain industries are more regulated than others. Some highly regulated industries include health care, financial services, accounting, oil and gas, and public utilities. When a business fails to comply with all applicable laws, regulations and standards, the business and the individuals who manage it often face a variety of sanctions. Sanctions can range from the loss of an operating license and/or program certification, to civil and criminal sanctions including monetary penalties and fines (corporate and person), to prison sentences.
Is a compliance report reality-based and relevant to today’s business practices?
YES! This assignment is designed with two purposes in mind: (1) to increase your awareness of the depth and breadth of compliance activities (and challenges) in today’s business environment, and (2) to inform you about emerging careers in compliance relevant to all BBA majors.
The compliance function is a critical function for management professionals. To help you learn about compliance generally, you will visit several websites which provide a glimpse into the evolving field of compliance. “This field exists to prevent harm at its source and to make powerful organizations safer and more ethical. Many people may expect their government can protect them from the harm corporations and large organizations can cause. But it is the nature of government and the legal system to always be reactive. Compliance and ethics professionals offer a link to the regulatory world that can allow government regulations to work
II. STEPS FOR COMPLETING & SUBMITTING THE REPORT
Learn about compliance in the context of corporate governance, risk management, and compliance (GRC).
For brief background information, read the items listed below. You do not need to read each one in detail, nor will you be required to include all of this material in your report. The purpose in Step 1 is to learn about compliance as an on-going essential business activity, and to find resources serving as a portal to primary sources for future use. I find them all very interesting, and after looking at each, you will have a good overview of the increasing significance of compliance functions for U.S. businesses.
A. Google GRC at http://en.wikipedia.org/wiki/Governance,_risk_management,_and_compliance.
NEVER quote from or cite Wikipedia in any academic or professional paper; it is not a credible academic research source! It can be useful in locating quotable, scholarly, primary sources.
Read the first page/section which defines the term “Governance, Risk Management, and Compliance.” Have you heard this term before? You need to know what it means in order to understand the systems approach to compliance which is becoming the norm in today’s legal environment of business. In other words, compliance is no longer something that happens only in the company’s lawyer’s office: it impacts all activities and personnel in a company.
B. An interesting federal government website is www.dol.gov. Put your cursor on Topics (at top of page) and a page of topic links will appear. Click Elaws. Elaws stands for employment laws assistance for workers and small businesses, providing a wealth of information.
C. Compliance is now a profession with thousands of trained and certified professionals working in many industries. For information on the compliance profession generally, check out the two websites below:
(1) Go to www.glassdoor.com. In the Job Title box, type compliance; leave the Jobs box alone; in the Location box, type Houston. You should then see a list of jobs by title with salary ranges. This gives you an idea of what the compliance industry is all about. Other job websites include Careerbuilder.com and Indeed.com (type compliance in ‘what’ and Houston in ‘where’).
(2) Visit www.corporatecompliance.org to learn about this professional organization. Select the tab “About SCCE” and read this. Then select the tab “FAQ” and look over the Questions. You might read the answers to a couple, such as the one about how certification by SCCE compares to other compliance certifications. This organization offers training conferences and tests that enable you to earn your certification as CCEP, a Certified Compliance and Ethics Professional. Certification can be a stepping stone for career change and/or enhancement, regardless of the industry you work in now or seek to enter after graduation. There is also an international designation for positions in multi-national corporations, the CCEP-I, if International Business is your interest.
D. Some industries are more advanced in their compliance and ethics efforts than others. The health care industry is a perfect example. Check out the Health Care Compliance Association at http://www.hcca-info.org. Click on “About HCCA” and read the paragraph about this group. As you can see, there are associations of like-minded professionals who engage in continuing education and training so as to excel in their roles as compliance and ethics professionals. And the business of healthcare is one of the top growing industries in the U.S. (all majors needed).
E. There are numerous associations whose sole focus is assisting businesses in compliance activities. For example, the Open Compliance and Ethics Group is a large non-profit engaged in compliance and ethics support activities. Visit the website at http://www.oceg.org. This site will show you tools available to compliance professionals. (You can also create an account for free if interested). Also visit http://www.globalcompliance.com. This website offers compliance products and services to all industries.
After visiting these websites, you should have an understanding of the education, training, and resources available to thoroughly implement a compliance program in a business.
STEP 2. RECENT COMPLIANCE PROBLEM & ENFORCEMENT ACTION
Learn about the main laws used in current enforcement efforts by the U.S. government regulators. Many actions are based on the following laws:
A. the Foreign Corrupt Practices Act (https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act),
B. the False Claims Act (https://downloads.cms.gov/cmsgov/archived-downloads/smdl/downloads/smd032207att2.pdf),
C. the Securities Acts (https://www.sec.gov/ where you can read about recent litigation, new regulations, and other interesting topics).
Open the links to short explanations of these two very important statutes, the FCPA and the FCA. Federal regulators currently have over 100 open investigations based on these laws.
STEP 3. THE ARTICLE YOU SUBMITED BELOW WAS APPROVED BY THE INSTRUCTOR. YOU SHOULD USE THIS ARTICLE TO WRITE YOUR PAPER
A/ industry: automobiles
B/ behavior at issue: Elon Musk announced that he had lined up funding to convert the publicly traded electric-car maker into a private company & funding secured. While the Rule 10b-5 on the Securities Exchange Act of 1934 prohibits any scheme to defraud, which includes misstatements or omissions of material information that affect the market value of share. Therefore, under this rule, the information was material and might have harmed investors if it was misleading.
C/ Government regulators involved: Justice Department had requested documents from the company. Investigators are examining whether Tesla misled investors about its production goals.
Article on Aug 24, 2018
STEP 4. WRITING THE PAPER
Organize your paper in the 3 parts below, using the given subheadings. Do not use Q&A format. Do not restate the question in your paper.
Part 1: Recent Compliance Problem and Enforcement Action
Using your selected article about an alleged legal/ethical compliance breach, answer the following questions (using A,B,C,D,E formatting). If the article does not address the question, state that the article did not address this point.
A. Identify the industry in which the compliance problem occurred or was alleged to have occurred.
B. What is the non-compliant behavior? When did happen? What laws or regulations were allegedly not followed?
C. When did the regulatory agency and/or court take action on this behavior?
D. What penalties and punishments resulted from this behavior?
E. What steps will be taken by the company to prevent the behavior from happening in the future?
Part 2: Student’s Opinion About the Recent Compliance Problem and Enforcement Action
This section is your opinion about the activities your article describes. What do you think about what happened, the company’s behavior, the government’s interventions, the impact on the industry and consumers and the public in general?
Part 3: Student’s Opinion About Compliance
Think about the information you have read in the compliance websites and about the compliance breach and enforcement action in your article, then answer the following questions (using A,B,C,D,E formatting). Do not use Q&A format. Do not restate the question in your paper.
A. Prior to this assignment, did you know the term GRC? After reading the websites listed in this assignment, what is your understanding of GRC today? Did your understanding change? How would you explain the term GRC and the role of compliance to your management team who are unaware of these terms? Does compliance impact all business functions, and if so, how?
B. Prior to this assignment, were you aware that compliance is becoming its own industry? Why do you think compliance is becoming a discrete industry?
C. What were some of the jobs from the jobs websites you visited? What were the salaries? Do you think a job like one of the listed jobs might be in your future after graduation? Why or why not? Why do you think compliance jobs pay high salaries? Identify at least 4 jobs by title and salary if given.
D. Assume you take a job after graduation that DOES NOT have ‘compliance’ in the job title. Do you think you will be required to perform compliance activities in that job? Stated another way, who do you think is responsible for compliance? Everyone in the company, or only those persons trained and certified in compliance?
E. What role to you see for compliance functions in the next 5 to 10 years in the U.S. legal environment of business?