Legal and Ethical Issues in Business: Vicarious Liability, FCPA, and Compliance, Essay Example

Introduction

The Company in Poland is a subsidiary of Feel Good and must therefore comply with all the policies that the corporation complies with, according to the FCPA compliance policies.

Q1. Does feel good face vicarious criminal liability for Liebman’s actions?

If Liebman’s donations violated FCPA, then Feel Good is in a position to face vicarious criminal liability. This is because on behalf of the corporation, Liebman gave the donations to a foreign official who was in an acting capacity for the Poland government and therefore violated laws. The amount of money offered to the Foundation was within the donation limit set by the corporation and Liebman was acting within his scope of authority when it came to issues of donations. He was also not doing this to benefit Feel Good, the corporation he worked for. However, it becomes an offence since Liebman filed most of the payments done to the Foundation under different uses which are approved by the corporation.

The other thing that makes it rather suspicious is the fact that oncology product’s sales did very well in the region. It is assumed that they were being influenced by the Director who was in charge of the Fund. Due to this, it is also assumed that the corporation used an intermediary to give out bribes and it therefore faces vicarious criminal liability for Liebman’s actions. On the other hand, it is the Director who approached Feel Good soliciting for funds for his foundation. It is assumed that Liebman saw this as an opportunity to use the Director to profit the company. According to Liebman, these payments were “dues for assistance from the Director” which shows that the Director must have given something in return for the favor done to his Foundation. Contrary to previous claims; the Foundation did not nor had never engaged in healthcare related programs. Liebman must have given the donations with the belief that the Foundation involved itself in healthcare programs related to the practice of medicine.

Q2. Strengths and weaknesses of feel good’s code of conduct.

The corporation’s Code of Conduct contributes to an effective compliance and ethics program as it addresses compliance to the applicable laws that each of the employees have to adhere to. The corporation also ensures that all employees are given a copy of the Code of Conduct and to ensure they have read it, they have to acknowledge that. This ensures that all employees know about the FCPA policies that must not be violated.

Feel good’s Code of Conduct is also effective as it has put it as a requirement for its supervisors and managers to discuss about the Code of Conduct and not just that but to also certify. This way, the management is also aware that failure to inform employees about the Code of Conduct will have its consequences and the employees are also aware that the company has a code of conduct that ensures FCPA compliance.

The corporation has made it clear to its employees on its Code of Conduct that dismissal will be exercised in case the employee is found violating the code. It is therefore assumed that Feel Good has put it clear in its Code of Conduct under what circumstances someone may be dismissed and this also contributes to an effective compliance program. The corporation shows that it is committed to its Code of Conduct and includes it as part of its annual performance objectives for the company. It is therefore assumed that since the Audit Committee approved it, Feel Good finds it effective enough to be used to gauge the corporation’s promotion of adherence.

It is also used for analyzing the performance of each of the employee and this shows that Feel Good is very much concerned with how the FCPA policies are handled by its employees. The Feel Good’s Code of Conduct therefore contributes to an effective compliance and ethics program. For an effective compliance and ethics program, one of the things it must have is a designated compliance officer and Feel Good has one who reports to the Feel Good’s General Counsel. However, the Compliance Committee which is chaired by the Compliance Officer seems to be only in place to review the Code of Conduct and written reports of the company and to make recommendations in case changes are needed.

The committee therefore only acts on reports submitted without validating their genuineness. Here, it is assumed that the committee does not make any investigations of its own regarding the activities of the corporation and whether they comply with the FCPA policies.

Liebman did not have to make any prior investigations into the Director’s Foundation since the companies legal compliance measures did not require foreign subsidiaries of the corporation to do that.  According to the FCPA compliance act, each corporation’s branch must keep accurate accounting records of all transactions.

The fact that Liebman was able to give false records to the finance department regarding the use of some of the payments shows a flaw in the corporations accounting standards. The Foundation also received payment from 2004 to 2007 and it looks like the corporation had not discovered this which also shows some flaws in the way the Code of Conduct is handled or with some of its policies. The corporation reviews all donations made annually including those made by each of the branch office. However, it was not aware of any criminal violation and is therefore assumed it did not find any evidence of the payments made between the company and the Director’s Foundation. It is also assumed that the corporation did not investigate what kind of assistance was being paid for when Liebman claimed they were dues for the Director’s assistance.

Works Cited

Foreign Corrupt Practices Act Compliance Policy.