Everything You Wanted to Know About Monitors-Part 4

By  Jay Rosen, CCEP Vice President, Business Development & Monitoring Specialist, Affiliated Monitors, Inc., USA

 

How Much Will a Corporate Monitorship Costs?

I will now look at the always controversial topic of monitorship costs and expenses.  In any post-resolution monitorship, the monitor is most likely coming in at the end of a long process. If it was a FCPA enforcement action, it could have been a years-long process with a lengthy investigation, coupled with an extensive remediation and then long negotiation with the government over the final penalty. Yet there is an approach that a company can use to help the final leg of this process be more palpable.

 

One must understand the settlement documents so that they can fully appreciate the scope of the monitor’s remit and what the government expects from the monitor.

Scope of the Monitorship

This process can be broken down into three key areas. The first is the scope of the monitorship. One must understand the settlement documents so that they can fully appreciate the scope of the monitor’s remit and what the government expects from the monitor. Some resolutions can have a narrow focus, with a finite number of records or other documents to review. With such information, the company can work to scope out a range of what their costs might be. Conversely the settlement documents can literally be wide-open, which obviously will have a dramatic impact on potential costs and even estimating.

 

The frequency of monitoring will have a significant impact on your overall monitorship costs.

Frequency of Engagement

The next factor to consider is frequency. By this I mean how often is the monitor engaging in monitorship activities for the company?

  • Daily?
  • Weekly?
  • Quarterly?

The frequency of monitoring will have a significant impact on the overall monitorship costs.

Duration

The final factor to consider is duration. Tied to this question of frequency is the length of the monitorship. How long will the monitorship last, one-year, two-years, three-years or even five years; is a critical element.

 

Does the monitor understand their role, as prescribed by the four corners of the settlement document(s)? Or are they going to reinvent the wheel for each new part of the monitorship?

Experience of the Monitor

The final factor (and often a key differentiator) is what is the relevant experience of the monitor?

As we explored, one really needs to have a very direct conversation with monitor candidates to determine if they have the requisite experience and temperament to work with other individuals or teams of individuals.

Does the monitor understand their role, as prescribed by the four corners of the settlement document(s)?

Are they going to reinvent the wheel for each new part of the monitorship?

If they take this approach as they are going along, this is will surely add to the cost of the monetization so that’s a factor that companies would be wise to consider. This brings up another important factor on potential costs as they are driven not only the scope of the monitorship but also (and this is key) the efficiency and experience of the monitor.

 

…Another important factor on potential costs as they are driven not only the scope of the monitorship but also (and this is key) the efficiency and experience of the monitor.

Cost Control and Monitor’s Workplan

A key document for cost control can be the monitor’s workplan, which lays out the monitor’s anticipated services. This gives the monitor, the company and the government a set of expectations for the tasks to be accomplished. Even though it may turn out to be a preliminary document, it does help to provide a level of certainty and a framework for moving forward.

 

It’s equally important for the monitor to understand they do not have to look at everything during the monitorship 

You can randomly sample and drill down to test if you need to do so. A monitor does not have to interview all persons in a high-risk location but can select certain employees for a focus group and then perform a round of interviews if required. The workplan and its execution can be a powerful tool to help not only estimate the total cost but also keep them down

jay rosen