OVERRATIONALIZING COMPLIANCE:
CHICKEN SOUP FOR THE COMPLIANCE
OFFICER
Anne Novick Branan
Broad and Cassel
500 East Broward Blvd
Suite 1130
Ft. Lauderdale, FL 33394
(954) 745-5212
abranan@broadandcassel.com
OVERRATIONALIZING COMPLIANCE:
CHICKEN SOUP FOR THE OFFICER
Anne Novick Branan
Broad and Cassel
© 2000
Compliance Officers’ Concern for
Personal Liability
 Scapegoat for corporate violations
 To some extent, concern as valid
 Purpose of government enforcement is to
instill fear of personal liability to deter
violations
Compliance Officer
 The nature of the job entails inherent
conflicts and risks.
 These conflicts and risks can and must
be managed by those assuming the
responsibilities of Compliance
Officers.
Liabilities
 Corporate vs. individual
 Criminal vs. civil
 Diverging interests of corporation and
employee
• Defendants
• Cooperation with government
• Consider option of resignation
Employee-Employer Liabilities
 Respondeat Superior Doctrine
• “Let the master answer”
 Employer accepts responsibility for
• Actions of Employee
• Acting within scope of employment
Defense Issues
 Joint defense
 Multiple representation
 Corporate policy on providing defense for
employees
• Exception: Refusal to finance defense of
employee who did not act in good faith or had
reason to believe his/her conduct was
unlawful.
Compliance Officers:
Managing the Risks
Investigate before accepting the job
 Understand Job Functions
 Set ground rules
 Be knowledgeable
 Understand the intangibles
 Use outside consultants
 Be proactive
 Develop strong, clear compliance policies
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Investigate before accepting the job
 Learn about the company
• Past history
• Current mission/corporate culture
• Organizational structure
- management
- parent-subsidiary
Investigate before accepting the job
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Reputation in community
Recent/anticipated business deals
Meet with Board of Directors
Corporate culture
Understand Job Functions
 To whom will you report
• Financial/legal officer vs. operations
• Direct access to governing body and CEO
• Assess commitment of “supervisor” to
compliance
Understand Job Functions
 Study job description
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Duties consistent with compliance objectives
Realistic scope of duties
Degree of independence
Level of empowerment
Understand Job Functions
 Is compliance program in place or will you
develop it
• Existing: get “feel” for existing program and
policies
• New program: dual role during development
Understanding Job Functions

What staff/support will you have
• OIG recognizes need for sufficient funding and
staff
• Size and type of organization
• Staffing needs
– clerical, compliance assistants
• Funding – education, hotline expenses, office,
consultants
Understanding Job Functions
 Full time/Part time
• Job Functions consistent
• Realistic time expectations
Set Ground Rules with Employer
 Written Contract
 To whom will you report
 Authority to hire outside counsel in matters
 Confidentiality
 Objectivity and independence respected
 Authority to delegate
 Obtain indemnification/insurance
coverage
Be Knowledgeable
Learn about company’s operations, “politics”
 Know compliance program documents
 Study the applicable law
 Obtain publications
 Connect with other compliance officers
 Follow trends in government enforcement
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Understand the Intangibles
 A compliance officer’s most valuable tools
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Sense of what’s right
Ability to “listen to your gut”
Common sense
Tenacity
Objectivity
Use outside consultants
 Experts in specific areas of law or business
• Establish list of reliable contacts
 Outside counsel for investigations
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Attorney-client privilege issues
Objectivity
Expertise
Get legal opinions
 “Sticky” internal political issues
Be Proactive
vs. reactive
 Avoid complacency
 Justify company’s interpretation of new or murky
regulations/rules
 Document compliance efforts
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Develop Strong, Clear Compliance
Policies
 Essential to avoid being put between “a
rock and a hard place” by senior executives
 Policies on investigations, reporting,
confidentiality are especially crucial
 Follow policies to avoid liability
 Balance between flexibility and detail
Tricky Compliance Issues
 Confidentiality of Reports and
Investigations
• Breaches of trust breed suspicion
• Be sure employees know of limits on promises
of confidentiality
• Resist pressure from senior executives to
breach confidentiality
Tricky Compliance Issues
 Handling of internal whistleblowers
• Keep identity confidential
–Anonymous reports
• Assure Report will be taken seriously
• Recognize the difficulty of “coming
forward”
–Fear of retaliation, isolation, losing job
• Take quick action
Tricky Compliance Issues
 Senior Executives Refusal to Cooperate with
Compliance Objectives
• Go to governing body
• Document your efforts
DISCUSSION SCENARIOS
Joy is the compliance officer for a
home health agency. An audit
reveals that a large volume of
services were billed, but not
performed. She learns that a
group of nurses meets regularly to
“fix patient records.” She advises
the administrator that an internal
investigation should be
conducted, but is told to “ forget
about it.”
DISCUSSION SCENARIOS
John is the compliance officer at a
large medical practice. He receives a
report that one of the physicians has
been accepting kickbacks from a DME
company when he refers patients for
equipment. The physician involved is
the chairman of the board and the
well-established and respected
physician who hired John.
DISCUSSION SCENARIOS
As the compliance officer for a hospital, Bill
receives a report that the compensation
formula used by the hospital to compensate
Dr. Jones is illegal. He looks at the
independent contractor agreement
between the hospital and Dr. Jones and
believes there is a problem also. However,
Bill becomes uncomfortable when he
realizes that Ed in the hospital’s legal
department drafted and approved the
agreement for signing.
Risk Management
for Corporate Compliance Officers
 You can manage the risks to
avoid personal liability and still
protect your company!