By Blandine CORDIER-PALASSE, ESCP Magazine
How company directors perceive the role of the legal department ? It is strategic and amplified in an increasingly connected world," notes Blandine Cordier-Palasse.. She is Chairman of BCP Executive Search and a former General Counsel and Company Secretary of listed groups.
20/30 years ago, all business schools such as ESCP included courses in corporate law (civil and criminal law) in their curricula. These courses prepared students in particular for the protection of property and people. And for my part, after my doctorate in law on strengthening equity capital, I took a Master's degree in Finance to understand business and finance.
The vast majority of in-house lawyers dealt with operational matters on a day-to-day basis.. And now there are also mergers and acquisitions. However, this has not changed. 15 years ago, the notion of an ethics charter was introduced. Companies wanted to ensure that their main asset - their human resources and management - would respect the values they had chosen.
Today, the risk seems to come from outside the company. The role of the Legal Department has evolved even further, becoming more strategic, anticipatory and pragmatic. It is also involved in the business, working more closely with management and operational staff to ensure the Group's development. The world is in a constant state of flux, with some major constants emerging.
In this geopolitical evolution, the United States has strengthened its zone of influence. They rely on their internet industry and the dollar. They are the first to have harnessed the power of their security apparatus to their economic might.
We saw this with the embargo on Iran. Any company that violated this embargo faced reprisals. They were subject to boycotts and even economic sanctions. This was particularly the case if the transactions had been made in dollars. This was seen as an extension of American territory. This is how international groups and multinationals came into being. Compliance teams were often attached to the legal department.
In view of the risks involved, the General Management of these groups has stepped up its interaction with the Legal Department.. They have decided to remove it from the scope of the Finance Department.. In most organisational charts, it was attached directly to it. And the legal department has developed a new Compliance function within the company. To assure management and the Board of Directors that no commercial or financial action undertaken by the company contravened the embargo rules laid down by these countries, or went through intermediaries appearing on lists of banned countries or persons, so as not to be subject to prosecution or sanctions for breaching these rules.
And then.., This brings us back to one of the major mutating risks feared by all the major economic players, especially in the private sector, which is the image risk. If a company is suspected of working or trading with a country under embargo, a campaign like a virus can be unleashed in the press. As a result, the company's name would be damaged. The consequences for image and credibility with customers and partners can be catastrophic. So today, the legal departments have added an extra string to their bow: protecting the image and reputation of the Group and its executives.
