New Principles Project on Corporate Compliance

On Wednesday, ALI members heard a preview of the new Principles project – PrinciplesPodgor-Ellen of the Law, Compliance, Enforcement, and Risk Management for Corporations, Nonprofits, and Other Organizations

This new project was presented by Reporter Professor Geoffrey Miller (NYU) and one of the Associate Reporters, Professor Claire Hill (Minnesota). Professor Miller started by providing an overview of the project. He said that there are two parts to the project: internal and external controls. On the internal side, there are three components: 1) government, risk management, and compliance.  On the external controls, there are two components: 1) criminal and 2) regulatory enforcement.

Professor Miller said there are four caveats to this project. One is that they will not be dealing with substantive law. They will only be looking at processes of external and internal controls. Their hope is to provide a Code of Best Practices. He noted that for the most part they will not be dealing with judicial decisions. Many of the materials come from regulatory agencies, deferred prosecution agreements, etc. They plan to look at a wide variety of materials in coming out with general statements of appropriate conduct.

There will be four reporters on this project and they will likely look at subjects such as the attorney-client and work-product privilege, compliance responsibilities in vendors and customer due diligence. They also will explore liabilities for breakdowns in compliance and whether enforcement credit should be given to government.

Professor Claire Hill (Minnesota) provided an overview of enterprise risk management.