Last week, the U.S. Department of Justice (DOJ) unveiled new guidance to federal prosecutors about bringing criminal cases against individuals in instances of corporate wrongdoing. The memo states that if a corporation wishes to resolve its own criminal charges and receive any credit for cooperation, it must provide the DOJ with all relevant facts relating to the individuals responsible for the misconduct.

We welcome this shift in policy. The DOJ has come under sharp criticism in recent times for failing to hold executives and other corporate officials accountable for wrongdoing that occurs at their companies.

The 2012 settlement with HSBC bank triggered widespread criticism of law enforcement for its failure to hold anyone individually responsible for massive corporate wrongdoing. Such a failure sends the message that individuals enjoy impunity from prosecution.

A recent study, which reviewed 303 US settlements with corporations from 2001-2014, found that only 34 per cent of these included prosecutions against individuals. There has been a disturbing failure by US regulators to hold individuals accountable in the largest cases of corporate malfeasance.

In the past two years alone BNP Paribas was fined $8.9 billion for processing transactions to countries on the US sanctions list; Commerzbank AG was fined $1.45 billion for a similar transgression. Since 2009, fines imposed on the banking industry for misconduct amount to US$232 billion and are expected to rise above US$300 billion by 2016.

Given the steady stream of investigations, we must question whether settlements are a deterrent or a dodge.

To be fair, settlements are an important tool in the arsenal of law enforcement agencies. They have helped to boost enforcement of foreign bribery laws, improved corporate compliance, and enabled prosecutors to bring more cases.

However, to truly deter wrongdoing, one needs effective enforcement directed at both corporations and individuals. If enforcement action is directed only at corporations, company officers and employees under pressure to meet performance targets will not have a meaningful incentive to refrain from improper conduct. Corporations rely on individuals to design, implement, adhere to and oversee controls; these individuals must be held to account.

Transparency International has made these points in its policy brief Can justice be achieved through settlements?, which emphasises the need to focus on individual culpability.

The DOJ has acknowledged that the new policy may take time to take effect and that it will face challenges in keeping its promise but the message is clear: individuals must be held accountable for their actions and no one is too big to jail.

Angela McClellan is co-author. She is a Senior Global Advocacy Coordinator at Transparency International Secretariat and editor of Can justice be achieved through settlements?