$2.$ U$.$S$.$ Sentencing Commission Guidelines for Organizations

U$.$S$.$ Sentencing Commission Guidelines for OrganizationsDetermining the PunishmentCompliance Program Steps

Unethical actions by organizations can result in fines from the U$.$S$.$ Sentencing Commission. Almost all businesses are covered by the guidelines, including labor unions, incorporated organizations, and nonprofits. Offenses covered by the guidelines include invasion of privacy, antitrust violations, theft, money laundering, civil rights violations, price fixing, and fraud. The guidelines are meant to encourage companies to prevent white$-$collar crime before it happens, rather than punishing companies after a law is broken. In fact, companies that voluntarily disclose illegal activities receive smaller fines. In this carrot$-$and$-$stick approach, the stick is the threat of heavy fines, while the carrot is a greatly reduced fine, but only if the company has started a compliance program that encourages ethical behavior. The compliance program must be in place before the illegal activity occurs.

In the carrot$-$and$-$stick approach used by the law to determine punishment for unethical behavior, the stick signifies:

the reduced fine for having an effective compliance program.

the incentive in the absence of any offense.

the threat of heavy fines based on the level of offense.

the incentive for cooperating with federal authorities.

The first step in a compliance program under the U$.$S$.$ Sentencing Commission Guidelines for Organizations is to:

delegate decision$-$making authority specifically to ethical employees.

enforce standards consistently and fairly.

encourage employees to report violations.

establish standards and procedures.