The following article was prepared by Mike Taylor, C.P.M., for distribution to ISM affiliate newsletters
The United States Sentencing Commission : http://www.ussc.gov/
Of particular interest is this overview of the Federal Sentencing Guidelines for corporations: Overview of the Organizational Guidelines
Organizations, like individuals, can be found guilty of Criminal conduct, and the measure of their punishment for felonies and Class A misdemeanors is governed by Chapter Eight of the sentencing guidelines.
Here is a link to the whole guide on corporations
Corporations can be found guilty of wrong doing and can receive fines and sentences. Corporate leaders and personnel can go to jail. Just ask some of the Enron people.
Employees acting within their defined scope and company procedures can still cause a corporation to be found guilty. An employee defense might be successful if the employee can claim they were only acting as directed.
Employees acting outside of their defined scope "rogue employees" still cause corporations to be found guilty, particularly if the corporation should have known what was going on. In this case the 'rogue employee" might have a much harder time avoiding jail.
Corporations can defend themselves by cutting an employee loose - blaming the employee and claiming that they didn’t know about it or that the employee was violating company policy?
Corporations can also mitigate fines and penalties by having an effective compliance and ethics program.
What kinds of illegal actions could an employee take which could get the company (or the individual) in trouble?
§8B2.1. Effective Compliance and Ethics Program
It doesn’t have to be fancy. In a small company I can imagine a one page document of simple text and bullets, signed by the president and distributed to all employees. Here are some suggestions for subjects which are worth including:
Surprisingly, there are many companies who offer compliance and ethics training programs and advice. Here are a couple of examples:
If I am the purchasing manager in a small company without a formal policy, would it be worth trying to identify and develop some ethics guidelines? Yes! My primary risk as an employee is that the company could claim I had gone "rogue", acting outside of company policy. The risk for the company - is that they have no guidelines and policy preventing employees from unethical - and potentially illegal conduct.
Don’t burn your bridges with the boss – he could take it the wrong way – but I’d start trying to document company ethics policies in a non-confrontational way. It could save both of you a little jail time.
(Disclaimer: I am not a lawyer and this isn’t legal advice – not enough big words – just common sense)
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