THE FEDERAL SENTENCING GUIDELINES FOR ORGANIZATIONS - A FRAMEWORK FORETHICAL COMPLIANCE

After years of debate over the importance of ethical conduct in organi zations, the federal government has decided to institutionalize ethics as a buffer to prevent legal violations in organizations. The key req uirements of the Federal Sentencing Guidelines (FSG) are outlined, and suggested actions managers should adopt to improve ethical compliance are presented. An effective compliance program is more a process and commitment than a specific blueprint for conduct. The organization has the responsibility to create an organizational climate to reduce misc onduct. The adoption of a FSG compliance program has the potential. to substantially lessen organizational penalties if there is due diligen ce to prevent misconduct. Federal courts determine the effectiveness o f an FSG program after a violation occurs.