December 2007 | The Corporate Counselor

In the wake of corporate scandals and high-profile prosecutions, many companies have avoided prosecution or have otherwise negotiated reduced sanctions in recent years by cooperating with prosecutors or regulators and entering into agreements that often include accepting a monitor. The monitor generally continues to investigate and proposes further changes where appropriate, reporting directly to the government at the company’s expense. 

The government sees installing a monitor as a way to ensure that the company does more than simply pay a fine and move on. The practical effect is that the company continues to some extent to be under investigation, even after the settlement. By imposing a monitor, the government keeps tabs on the company and tries to make sure it deserves the concessions it has received. 

While life under monitorship can be onerous, it can also be beneficial and is often the company’s best option under the circumstances. In this article, we discuss what happens during monitoring, what to look for in a prospective monitor, and how to make the most of a monitorship.