The most significant development for Boards and compliance in continues to come from the Delaware courts, which have been expanding the civil law obligations of Boards through a series of court decisions involving the expansion of the Caremark Doctrine for the past several years. These developments began with the Marchand (Blue Bell Ice Cream) and reached a peak with the Boeing case which stands for the continuing proposition that a Board cannot simply have the trappings of oversight, it must do the serious work required and have evidence of that work (Document, Document, and Document). The decision in Boeing is yet a further expansion of the Caremark Doctrine, once again beginning with Marchand. Boeing also stands for the proposition that a company must assess its risks and then manage those risks right up through the Board level. Finally a Board must be aggressive in their approach and not simply passively taking in what management has presented to them.
The DOJ has also made clear its thoughts on the role of the Board of Directors. The role of the Board is different than that of senior management. Both the 2020 Update  and DOJ Antitrust Division’s 2019 Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations was even more explicit in announcing their expectation for robust Board oversight of a corporate compliance function. I would also add the DOJ may soon expect there be a Compliance Committee separate and apart from the Audit Committee.
The DOJ continually speaks about the need for companies to operationalize their compliance programs. Businesses must work to integrate compliance into the DNA of their organization. Having a Board member with specific compliance expertise or heading a Compliance Committee can provide a level of oversight and commitment to achieving this goal. The DOJ enshrined this requirement in the FCPA Corporate Enforcement Policy. This means that when your company is evaluated by the DOJ, under the factors set out in the 2020 Update and FCPA Corporate Enforcement Policy, to retrospectively determine if your company had a best practices compliance program in place at the time of any violation, you need to have not only the structure of the Board-level Compliance Committee but also the specific subject matter expertise on the Board and on that committee.
All of this means that every Board of Directors needs a true compliance expert. Almost every Board has a former Chief Financial Officer, former head of Internal Audit or persons with a similar background, and often times these are also the Audit Committee members of the Board. Such a background brings a level of sophistication, training and SME that can help all companies with their financial reporting and other finance-based issues. So why is there not such SME at the Board level from the compliance profession?
 Three key takeaways:
1. The 2020 Update required active Board of Director engagement and oversight around compliance.
2. Board communication on compliance is a two-way street; both inbound and outbound.
3. The Delaware courts have been expanding Boards roles through expansion of the Caremark Doctrine.
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