The Justice Department’s recent announcement encouraging prosecutors to bring criminal cases against individuals rather than just corporations has big ramifications for how companies communicate both internally and externally. 

Under sustained public pressure from critics who have long complained that prosecutors have been too soft on white collar criminals, the Department grabbed headlines last month when it published a policy memo encouraging prosecutors to target not just companies for alleged wrongdoing but individual employees who contributed to the misconduct. 

While the memo largely codifies what had been an internal goal of prosecutors, it will nonetheless have important ramifications for corporations. Companies will now be expected to turn over both the names of employees believed to have played a role in any misconduct as well as any evidence against them. 

How will the Justice Department prod companies to do this? By wielding a heavy stick. The Justice Department’s memo declares the U.S. will no longer give companies credit for cooperating with an investigation unless the companies also identify complicit employees “regardless of their position, status or seniority.” 

Corporations that don’t turn over names and evidence against their own workers face stiffer punishment, including bigger fines, a criminal rather than a civil complaint and even the potential to have to plead guilty to a crime. The Justice Department could also leverage other tools at its disposal, such as forcing a firm to accept a corporate monitor for a period of time or operating under a lengthy deferred prosecution agreement. 

To be clear, the Justice Department has long expected firms to identify executives and other employees involved in any wrongdoing and has told companies they can gain more favorable treatment – such as lower fines -- for doing so. The expectation has also been that companies will cough up employees who were complicit in any wrongdoing and many companies have complied.

Yet few executives – most notably on Wall Street – have been charged by the Justice Department, prompting questions about the Obama administration’s commitment to prosecuting individuals and increasing pressure on the Justice Department to show its commitment to holding people – not just companies -- accountable. 

Massachusetts Senator Elizabeth Warren has been among the most vocal critics, continually questioning top policymakers about the lack of Wall Street prosecutions. Her agitation is already making this an issue in the 2016 presidential election and focus on tough enforcement will likely only intensify in the coming months, particularly among Democrats. 

In announcing its new policy, the Justice Department upped the ante for itself. For proof, look no further than the criticism that swirled in September when DOJ announced a $900 million settlement with General Motors Corp. over a faulty ignition switch. As part of the deal, the Justice Department agreed to defer prosecution of GM for three years on a single count of wire fraud and concealing a safety defect. No GM executives or employees were charged as part of the settlement, in part because of laws that legal experts said made it hard for the Justice Department to prosecute individuals. Coming just days after the memo’s release, critics lashed out at the Justice Department for not following its own guidelines and the New York Times called GM’s treatment “corporation probation.” 

This will only increase pressure to prosecute executives and other employees. Attorney General Loretta Lynch has publicly put her prosecutors on notice to go after individuals and raised expectations that the big settlements will not be inked without companies naming names. 

So what does this mean if you’re a corporation facing a Justice Department investigation?

First, internal investigations will be even more essential since companies must determine where the problem began and how high up the chain it went in order to avoid even more reputational damage from a government investigation. Corporations will need to provide the Justice Department with evidence they find about where a problem manifested, making a rigorous internal investigation critical. 

Second, this poses communications challenges for companies during the investigation, while settlement discussions are ongoing and when and if individuals are charged. While companies may be eager to be seen by investors as cooperating with an investigation, they will have to be careful to avoid seeming as though they are on a witch-hunt to spare themselves tougher punishment. 

Companies will also have to walk a fine line in discussing employees who are identified during an internal review as potentially having a role in the wrongdoing. Evidence of misconduct cannot be confused with actual criminal guilt, and corporations will have to steer clear of proclaiming anyone’s guilt or innocence and leave any assignations to the authorities.

Companies must also be prepared to communicate how the problems were able to manifest in the first place – what went wrong? -- and what steps are being taken to avoid a repeat of the problem. 

Third, companies should be aware that this shift in policy could make it harder to attract and recruit employees – particularly in the banking sector --given the potential challenges employees could face in a government investigation. Employees may want to know what their legal protections will be and whether they will receive any indemnification or legal assistance if they somehow wind up in the government’s crosshairs and are cleared of any wrongdoing. 

Obviously, it is far better if problems never begin in the first place, which means chief executives and other senior leadership must continually emphasize that employees follow the law and reward prudence over unnecessary risk-taking. Strong internal controls and compliance monitoring as critical so that companies can identify red flags before the conduct gets out of control. 

It’s unclear exactly how much will change as a result of the Justice Department’s new stance. But given the approaching 2016 election, continuing populist anger towards Wall Street and Loretta Lynch’s desire to stake a claim as the new Attorney General, companies should expect the Justice Department to adopt an even more aggressive stance than in the past. 

Deborah Solomon is a Principal at Finsbury and is based in Washington and New York.