Compliance Management for Public, Private, or Non-Profit Organizations »

Michael G. Silverman heads a consulting practice that helps organizations manage risk and compliance, corporate ethics, and corporate governance. He is also on the faculties of Columbia University's School of International and Public Affairs and at the Financial Industry Regulatory

Authority, the largest non-governmental

regulator for all securities firms doing

business in the United States.

Understand and mitigate compliance risk in any organization

Compliance Management for Public, Private, and Nonprofit Companies is an expert guide that delivers the strategies and techniques needed to establish, manage, and improve the compliance function within any organization.

Written by FINRA faculty member Michael Silverman, this hands-on resource offers valuable advice for identifying compliance risk and addressing complex ethical issues. It also provides best practices for using the

board of directors, trustees, and senior management to promote compliance. From an

operational standpoint, it covers such critical topics as:

• Establishing a compliance plan and program
• Implementing compliance-related technology
• Spearheading compliance education and training programs
• Developing effective compliance policies
• Operating a whistle-blowing program
• Managing internal control and assessment techniques
• Securing the appropriate staffing and budgeting requirements
• Assessing compliance effectiveness

A wealth of case studies taken from both the author’s personal experience as well

as the mainstream media brings to life the application of covered techniques in the

real world.

Michael G. Silverman heads a consulting practice that helps organizations manage risk and compliance, corporate ethics, and corporate governance. He is also on the faculties of Columbia University's School of International and Public Affairs and at the Financial Industry Regulatory

Authority, the largest non-governmental

regulator for all securities firms doing

business in the United States.

Acknowledgments     xiii
Introduction     xv
Setting the Context
The Expanded Focus on Compliance     3
The Forces at Work     5
The Judiciary     6
The Legislative Response     10
The Expanding Role of Federal Agencies     12
State Governments     17
Government Examines Its Own Operations     18
The Nonprofit Sector     19
Private-Sector Oversight     21
Corporate Social Responsibility     21
Shareholders and NGOs     22
Global Telecommunications and the Internet     27
Summary     28
The Mandate for Compliance     31
Regulatory Compliance     33
Internal Corporate Compliance Systems     37
The Private Sector and Organizational Compliance     39
The Nonprofit Sector     47
The Public Sector     50
Summary     52
The Foundations of Compliance
Compliance and Ethics: Challenges and Approaches     55
Intertwined but Not Interchangeable Concepts     56
Motivations for Compliance     57
Barriers to Compliance     59
The Organization's Cultural Framework     61
Rules versus Integrity     63
Corporate Codes of Conduct     64
Creating an Ethical Culture: The Linchpin     70
Nonprofit Organizations     72
Public Sector     74
Summary     75
Leadership and Culture: The Foundations of Compliance     77
The Legal and Regulatory Underpinnings     79
Self-Regulatory Organizations: New York Stock Exchange     84
Boards of Directors     85
Nonprofit Organizations     92
Senior Management     96
Public-Sector Organizations     99
Summary     101
The Modern Compliance Organization
Managing Compliance: Goals and Structure     105
Designing the Compliance Program     106
Government and Regulators' Guidance     108
The Compliance Program Charter     110
Features of a Modern Compliance Program     113
The Compliance Structure     116
Outsourcing Compliance     124
Coordinating the Compliance Program     127
Staffing the Compliance Program     131
The Role of the Chief Compliance Officer     134
Budgeting for the Compliance Program     141
Small and Medium-Sized Organizations     144
Summary     149
Policies, Communication, and Training     151
Policies and Procedures     151
Communication     158
Training     161
Summary     173
Hotlines, Whistle-Blowers, and Investigations     175
Whistle-Blowing Programs     175
Instituting a Whistle-Blowing Program     179
Managing Information     187
Tracking Inquiries     188
International Operations     189
Related Issues     189
Conducting Investigations     191
Summary     197
Information and Technology: Challenges and Tools for Compliance     199
Federal Regulatory Requirements     200
State Regulatory Requirements     201
International Requirements     201
Technology Standards     202
The Challenge of Multiple Regulations     202
Creating a Multidimensional Compliance Framework     204
Privacy and Information Security     206
Third-Party Relationships and Outsourcing     211
Compliance Technology Tools     211
Education, Communication, and Training     213
Summary      214
Compliance and Oversight: Risk, Monitoring, Audits, and Regulators     215
Compliance Risk     215
Regulatory Requirements     216
Standards-Setting Organizations     218
Governance and Compliance Risk     219
Compliance Risk Assessment Process     221
Compliance Monitoring and Audits     235
Regulators     243
Summary     245
Compliance and Controls     247
Government Regulations     248
Internal Control Regulation and the Public Sector     251
Self-Regulatory Organizations: New York Stock Exchange     251
Standards Setting Organizations: Committee of Sponsoring Organizations of the Treadway Commission     252
The Internal Control Program     258
Summary     264
Evaluating Compliance     267
Criteria for Compliance Effectiveness     269
The Need for Evaluation     271
Techniques for Evaluating Compliance     271
Assessing Compliance Effectiveness     272
Postevaluation Actions     283
Summary     284
The Future of Compliance
Compliance, Going Forward     287
Brief Retrospective      288
A Profession with Growing Pains     288
At the Crossroads     289
The Road Ahead     294
Resources     295
Index     299