The Wall Street Journal reported late yesterday that the SEC has delayed the anticipated announcement of final regulations for the whistleblower provisions of the Dodd-Frank Act. No real surprise, as the SEC has missed previous deadlines and there is still chatter concerning potential operational funding issues. That said, now is not the time to get lax with your internal compliance programs, just because you think that the SEC has given you a reprieve. Just the opposite. Now is the time to strengthen your ethics & compliance initiatives like never before.
Last week I had the opportunity to lead a Compliance Week webinar on the Dodd-Frank Act and the pending SEC regulations. We discussed the positive and negative aspects of the SEC’s incentive program, and the importance of continuing to maintain the best possible internal reporting program, etc. Literally moments before the webinar was to begin, I came across a Ben Kerschberg blogpost on Forbes.com that echoed many items in my presentation. Kerschberg argued, as we do, that the number one thing companies should be doing right now is fostering a top-down culture of compliance. As Kerschberg said, “Whistleblowing programs must provide secure means of communicating information internally with assurances that the employee’s career will not be harmed.”
One webinar attendee asked this question: What should be done about existing policies and hotline programs currently in place? The answer is threefold: 1) review and update policies currently in place (including possibly establishing new internal incentive programs, anti-retaliation policies, and mandates covering simultaneous disclosure); 2) work to improve the awareness and visibility of existing programs; and 3) take a comprehensive look at your existing reporting process and make sure it is active and thorough.
Remember that delays or not, there is no more critical time than right now to assess your internal ethics awareness and hotline programs.