The board, and several of its key committees, may wish to
re-evaluate the extent to which organizational culture is being
properly reflected in the incentive targets provided under certain
executive and (especially) physician/physician group employment
Recent developments in the broader commercial sector provide a
cautionary note on the compliance risks that can arise when
performance incentives are misconstrued by employees to justify
behavior that is inconsistent with the company’s commitment
to legal compliance. When properly constructed, performance
incentives can be an important component of legally appropriate
employment agreements. They can help motivate executive and
physician employees to achieve meritorious corporate and mission
goals. Yet the recent commercial developments raise the possibility
that, in certain situations, some employees may misinterpret the
incentives as promoting conduct that is, in fact, completely
contrary to the organization’s ethics and risk culture. These
developments suggest that such misinterpretation may occur in spite
of significant and explicit compliance education about the proper
goals of the incentives.
The board, principally through its compliance, and physician and
executive compensation committees, may choose to exercise increased
oversight over incentive compensation arrangements, the terms of
which are subject to legal standards (e.g., tax and
anti-fraud and abuse). The primary focus of this oversight would be
threefold: first, to determine whether significant
performance incentives are consistent—in both design and
application—with the organization’s compliance program
and code of ethics; second, whether there is appropriate
management and compliance oversight of their application; and
third, whether existing compliance education mechanisms
are appropriately effective in instilling a culture of compliance
throughout the organization.
Allegations of corporate malfeasance may arise in myriad ways: whistleblowers, current or former employees, internal or external auditors, shareholders, the media, regulatory or law enforcement agencies, and/or the plaintiff 's bar.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Drafting an arbitration clause for your agreement is a straightforward matter most of the time. Sometimes it can be as simple as incorporating by reference an arbitration provision in another document or agreement.
In the wake of the election of Donald Trump as the 45th President of the United States, Mary Jo White has announced her intent to step down from her role as Chair of the Securities and Exchange Commission.
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