Your Board is responsible for compliance failures. And, board members can be held personally liable for financial losses caused by those compliance failures.
In other words, your Board is ultimately responsible for your compliance program.
Does your Board know this?
Board Responsibility
The OIG has said: “every Board is responsible for ensuring that its organization complies with relevant Federal, State, and local laws.”
And, the OIG Compliance Program Guidance for Nursing Facilities, Footnote 4, explains that corporate directors can be personally liable for compliance failures: “Recent case law suggests that the failure of a corporate director to attempt in good faith to institute a compliance program in certain situations may be a breach of a director’s fiduciary obligation. See, e.g., In re Caremark Int’l Inc. Derivative Litig., 698 A.2d 959, 970 (Ct. Chanc. Del. 1996).”
The Caremark lawsuit established that the Board has:
A duty to attempt in good faith to assure that a corporate information and reporting system,
- which the Board concludes is adequate, exists,
- and that failure to do so under some circumstances, may...render a director liable for losses caused by non-compliance with applicable legal standards
Keeping Your Board Informed
The Board has a big job with respect to compliance. This means that on-going board training and education should be on every Compliance Officer’s task list as a standing item. Annual training is not enough and can be accomplished with MPA put together an outline of what this might look like:
Need Help? MPA Can:
- Train your board by Zoom
- Provide written education for your board
- Do you need training topics? Purchase a subscription to MPA’s Compliance Newsletter. Once a month, MPA provides a summary of OIG, DOG, FBI and OCR enforcement updates as well as recent compliance and HIPAA news stories. You can read a sample report here.
