Guide to Creating an Effective Compliance-Based Employee Incentive Program (Part One of Two)

Companies with established and nascent FCPA programs alike are looking for ways to further enhance a compliant culture for their employees.  The creation of an effective compliance-based employee incentive program that both encourages compliant behavior and demonstrates the company’s compliance commitment is a “cutting edge issue” with which more and more companies are grappling, Lucinda Low, a partner at Steptoe and Johnson, told the Anti-Corruption Report.  To assist companies as they consider and develop such a program, the Anti-Corruption Report is publishing a best-practices guide to creating and implementing an efficient and effective incentive program.  In this, the first part of the guide, we discuss the risks and benefits of incentivizing compliance, outline three steps a company should take before creating an incentive program, and discuss how a company should measure compliance.  The second article in the series will discuss how companies can review the compliance-related activities of its senior and middle management and will provide suggestions for carrots and sticks a company can use to encourage compliant behavior.  See also “When, Why and How Should Companies Discipline Employees for FCPA Violations?” (Sep. 19, 2012).

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