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Compliance body: single-person or collegiate?
Having analyzed in the previous #ComplianceKeys the state of criminal liability of legal entities at the international level, the following publications will again take a national approach and analyze some issues related to the main elements that make up Compliance Systems.
In this sense, in accordance with article 31 bis 2. 2ª of the Criminal Code and all national and international technical standards on Compliance, one of the essential elements for the effectiveness of any Compliance System is the “Compliance Body“.
Criminal law regulations are relatively sparse regarding the characteristics of this Body. The aforementioned provision only establishes that the supervision of the functioning and compliance of the Compliance System must be entrusted to a body of the legal entity with autonomous powers of initiative and control or that is legally entrusted with the function of supervising the effectiveness of the internal controls of the legal entity.
In this regard, the legal entities that decide to adopt a Compliance System must reach several decisions regarding the configuration of the Compliance Body: Should an individual person be appointed or should a collegiate body be appointed? Who should constitute the Compliance Body? What functions should the Compliance Body have?
This ComplianceKeys will seek, briefly, to shed light on one of the issues raised above: some factors to be taken into account when choosing whether to set up a single-person Compliance Body (either under the name of Compliance Officer, Head of Compliance, among others) or a collegiate body (through a Compliance Committee, Ethics Committee, etc.). In any case, this second option is not an obstacle to the appointment of a Compliance Officer among the members of the collegiate body.
As it has been introduced, the regulation established in this regard in the Criminal Code does not provide an answer to this (and other) question. From going to the Circular of the State Attorney General’s Office 1/2016, on the criminal liability of legal entities, it can be concluded that the vagueness of the regulation is intentional. This vagueness would seek to provide freedom to legal entities to configure their Compliance Bodies in a way that suits their size, activity and resources.
Specifically, the aforementioned Circular states the following: “[…] the regulation refers to a compliance body (compliance officer or head of compliance) which, depending on the size of the legal entity, may be made up of one or more persons, with adequate training and authority“.
The decision to configure the Compliance Body as a unipersonal or collegiate body will be of a strategic nature, and it should be borne in mind that each option has its advantages and disadvantages.
As an illustration, some of the advantages and disadvantages commonly associated with each of the options are shown schematically below.
Option | Advantages | Disadvantages |
Single-person body | + Greater agility in decision-making.
+ In general, greater responsibility and commitment as the Compliance function falls on a single person. + In general, less need for resources. + Identification of the Compliance System with an individual who, if correctly chosen, can generate greater confidence in the members of the legal entity. |
– Increased possibility of existence (or, as the case may be, relevance) of conflicts of interest.
– Adoption of relevant decisions on Compliance matters in a non-consensual manner, by a single individual. – Possibility that the workload generated by the Compliance function is difficult to assume by a single individual. |
Collegiate body | + Consensual adoption of decisions on Compliance matters.
+ Easier processing of communications that may eventually affect a member of the Compliance Body. + Possibility of constituting the Compliance Body incorporating complementary technical profiles (legal, IT, labor). + Attractive option for medium-sized entities that do not have the resources to hire a person specifically dedicated to the development of the compliance function but have a Compliance System of a certain complexity. |
– Slower decision-making and execution of decisions (difficulty in convening meetings, adopting certain conflictive decisions, reacting to urgent situations, etc.).
– Possible configuration of a collegiate body with executive management profiles (conflicts of interest). |
In addition, it should be remembered that the Criminal Code provides for the possibility that, in the case of small legal entities, the compliance function may fall directly on their management body.
In order to recapitulate the different issues discussed in this article, the conclusions to be drawn from the above are that each entity will be free to choose, depending on its size, the sector in which it operates, the nature of its activities, taking into consideration the advantages and disadvantages associated with the decision, the configuration of the specific Compliance Body that will lead the development and supervision of its Compliance System.
Compliance Department of Molins Defensa Penal.