Canadian Competition Bureau Issues Bulletin on Corporate Compliance Programs
Development of a well-designed corporate compliance program, to guard against anti-competitive actions, has long been considered a worthwhile endeavor for any corporation. In issuing a revised Bulletin on Corporate Compliance Programs, the Canadian Competition Bureau (“the Bureau”) has sent a strong message about the importance of such programs for both businesses and consumers, and has offered guidance on how companies can create an effective compliance program. A draft of this Bulletin was issued on September 18, 2014, and is available for public comment until November 17, 2014. It can be found here.
One compliance program element that the Bureau emphasizes in the Bulletin is “fostering a culture of compliance,” in which executives “set the tone by their own actions and recognize that it is part of their leadership role to ensure compliance with the law.” To that end, the Bureau suggests that responsibility for a corporate compliance program be placed with a designated compliance officer, occupying a high level executive position. It is also important that this compliance officer be empowered to act independently, and be provided sufficient resources – such as financial resources and unfettered access to different aspects of the business – in order to effectively assess compliance risks. Active engagement from employees at different levels of the business will lend credibility to the program and encourage employees to take an active role in furthering the compliance program goals.
Although it recognizes that businesses must have “flexibility” to adopt a compliance program that fits their needs, the Bureau has identified seven “essential elements that should be incorporated in every program.” These elements are: (1) Management Involvement and Support; (2) Corporate Compliance Risk Assessment; (3) Corporate Compliance Policies and Procedures; (4) Training and Education; (5) Monitoring, Auditing, and Reporting Mechanisms; (6) Consistent Disciplinary Procedures and Incentives for Compliance; and (7) Compliance Program Evaluation.
Within each of these categories, the Bureau sets forth the types of procedures that must be implemented to establish an effective compliance program. With respect to monitoring, auditing, and reporting, for example, the Bulletin reiterates that the “independence of the compliance officer’s investigations is paramount, given that management may be involved in a possible contravention, or may be complicit through lack of action.” With respect to discipline, the Bulletin provides that a program should “explicitly state” that disciplinary actions will be taken when an employee fails to comply with the compliance program or with antitrust laws. It is also suggested that employees be incentivized – with promotions or bonuses – for performing in accordance with the compliance program. The overarching theme of all of these sections is transparency, collaboration, and encouraging employee engagement with and investment in the compliance program.
The Bureau also indicates that it may give weight to the existence of an effective corporate compliance program when resolving a case brought under the Canadian Competition Act. The presence of such a program may impact the Bureau’s sentencing recommendation or fine recommendation, for example. This provides an additional incentive for a company to implement a credible corporate compliance program before there is any hint of anti-competitive conduct, rather than waiting until the initiation of an investigation.
The Bulletin provides flexible guidelines for successful compliance programs, acknowledging that corporate compliance is not a “one size fits all” proposition. For corporations seeking a more detailed road map to creating a workable compliance program, however, the Bulletin provides a Corporate Compliance Program Framework in an appendix. The Framework provides text to be completed by the subject company, and can be tailored to the company’s needs. Other Bulletin Appendixes include a sample “Due Diligence Checklist” and case studies of hypothetical compliance issues that may arise.
The Bulletin provides a useful toolbox for any corporation doing business in Canada that wishes to ensure legal compliance and avoid potential liability for anti-competitive conduct. Its overview of “essential elements” for compliance and its appendices provide clear, step by step instructions for crafting an effective corporate compliance program.