Lessons from the Olympus Corporate Ethics Accord
In a significant move towards enhancing its compliance program, Olympus Corporation of the Americas is now under the guidance of the Compliance Committee, as assigned by the Corporate Integrity Agreement (CIA). This comes after the company was embroiled in a global enforcement action for violations of the domestic anti-kickback statute, the False Claims Act, and the Foreign Corrupt Practices Act (FCPA).
The CIA requires Olympus to maintain a comprehensive compliance program with specific elements, including a compliance officer, a compliance committee, training and education, policies and procedures, a hotline for reporting compliance issues, and monitoring and auditing activities. The Board is expected to meet at least quarterly to review and oversee the compliance program.
The Board is also required to adopt a resolution, signed by each individual member, summarizing its review and oversight of Olympus' compliance with federal health care program requirements, FDA requirements, and the obligations of the CIA during each reporting period. This resolution must include specific language stating that the Board has made a reasonable inquiry into the operations of Olympus' compliance program and concluded that, to the best of its knowledge, Olympus has implemented an effective compliance program to meet these requirements.
The compliance committee, as required by the CIA, must include senior management from various departments such as sales, marketing, legal, medical affairs, regulatory affairs, research and development, human resources, audit, finance, manufacturing, and operations. The CCO, John Slowik, serves as a co-chair with the CEO, and the committee's meetings are required to have minutes kept and made available to the Office of Inspector General (OIG). Changes in committee membership also have to be approved by the OIG.
The CIA also outlines the compliance responsibilities for Olympus' management and the Board of Directors. As part of the enforcement action, Olympus entered into a deferred prosecution agreement (DPA) and a corporate integrity agreement (CIA). The company is required to implement a risk assessment and mitigation process under the CIA.
The Board's oversight responsibilities, as outlined in the CIA, may move to best practices for an anti-corruption compliance program. The certification required on the Board resolutions is hoped to make each Board member take their oversight responsibilities seriously. The Board must report to the OIG, describing the documents and materials it reviewed, as well as any additional steps taken, during each reporting period.
Notably, John Slowik, the company's former Chief Compliance Officer, was fired for attempting to stop illegal activities internally. He was subsequently awarded over $51 million for his whistleblower claim. This incident underscores the importance of a robust compliance program and the role of the Board in ensuring Olympus' adherence to federal health care program requirements, FDA requirements, and the obligations of the CIA.
