By Blandine CORDIER-PALASSE, Revue RH&M n°62 p.47
"I didn't know that the law could be so important in business life". This CEO realised the extent to which intelligent legal and financial arrangements could add significant value to the way he developed his business and strategically protect his liability.
Compliance is part of the new management. It is a behaviour modification programme. It is a management issue.
In the pharmaceutical industry, it is no longer necessary to demonstrate the shock and violence of the impact. We can no longer reason by saying that the gain from eliminating the competitor is more important than the risk of a fine. When you look at the cost of an investigation and a remediation plan - at the company's expense - it's a shame we didn't invest earlier in prevention. The cost/benefit ratio has been reversed.
We have to explain to managers that they will be better off if they play by the rules. The criminal risk for managers is added to the risk to their image. Companies like Enron have been destroyed, not to mention the very detrimental impact on managers' career development.
Double cultural reform: The company is being transformed by compliance programmes and digital technology, with a huge impact on the organisation.
What's the point? For companies, the real question is no longer "What is legal" but "What is right". Business is now dematerialised and globalised. You can't have an open economy and not apply global rules. The use of rules to prevent corruption, money laundering, competition, cybercrime, export control, the protection of intellectual property, etc. are all part of a global approach.
personal data have come from both companies and governments. Showing that we are not capable of managing these problems is an admission of failure.
weakness.
It is also a destabilising factor. In particular, it is out of the question to invest in a company that is at risk of being involved in legal proceedings. Corporate finance has become a culture of ethics. And the role of the law in business is changing. It is a management tool at the service and heart of the business.
Companies are increasingly aware of risk. Managers are now the first to be held liable. In addition, the liability of the legal entity is complementary and accessory. The director must therefore prove that he has set up an effective compliance structure. If they fail to do so, they incur personal, direct and non-delegable liability. When the US authorities initiate proceedings, they target both the executive and the company and issue a personal warrant against the executive.
What is at stake is the company's liability and its reputation, and the director is accountable for this. The General Counsel must ensure that the company and its directors are protected. The corollary and paradox in terms of performance and transparency is that the company must have the capacity to manage confidentiality internally and within a secure legal framework in order to preserve business secrecy. Management must make this an element of internal policy as important as strategy.
And if you feel that the legal department is not in a position to take on this role, don't hesitate to strengthen its skills.
A high-performance legal department that matches your strategic ambitions brings you significant added value by intervening at a very early stage in the legal and financial engineering of your projects and by ensuring the legal security of your operations and your organisation. The governance of your group is at stake, as is its strategic protection in order to preserve its image and reputation and to protect the personal liability of your directors.
Blandine CORDIER-PALASSE
Blandine Cordier is founder and President of BCP Executive Search and Vice-President of the Cercle de la Compliance, which she co-founded after 20 years as a lawyer and legal director in listed groups. She also holds a doctorate in law, a Master's degree from ESCP and is a member of the Paris Bar. She is also a company director.
