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General counsel, compliance functions and reporting (health care)

According to a survey of members of the American Health Lawyers Association released in July 2004, jointly conducted with the Health Care Compliance Association, a key question is whether the general counsel can or should be the company’s chief compliance officer. Does such a dual role create conflicts of interest?

The survey results, based on 429 responses from 1,964 in-house counsel and 2,490 healthcare personnel, deserves careful review, because its general guidance applies beyond the heavily-regulated healthcare industry. The report is available from the US Dept. of Health and Human Services, Office of the Inspector General and has been republished in Practicing Law Institute’s, Advanced Corporate Compliance Workshop 2005 (No. B-1504 at 435).

To the question, “Does your in-house counsel or one of your in-house attorneys also serve as the corporate compliance officer?” the answer was: “yes,” by 25 percent of the respondents; “no, we have an in-house attorney, but he or she does not serve as the compliance officer” by 60 percent.

Of those companies with a compliance officer, 36 percent of them were lawyers. The compliance officers reported most frequently to the CEO (56%), Board (34%), general counsel (20%), CFO (8%), or someone else (20%) – with the percentages exceeding 100 because of instances of dual reporting.

One final metric. In those companies where an in-house lawyer serves as the compliance officer, 73 percent of them have a formal policy that allows that lawyer “independent access to the Board of Directors on a compliance issue.”

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