Corporate Governance Compliance and Risk Management
For all corporations, whether they be private or public, domestic or international, there exists a new and palatable legal climate replete with corporate governance, compliance and risk management. What used to be solely within the private purview of a Board is now being regulated, or there is rumour of upcoming regulation. Unfortunately, in an ever-growing cross-border environment, this creates an extraordinarily burdensome and costly task for corporations, whether they be large or small, to ensure that they are compliant with their domestic laws, but also with the international laws of those countries into which they are seeking or hope to engage in business. To be proactive in an environment of uncertainty with current compliance requirements, not to mention the naturally unknown risks of the future, can render a corporation impotent to survive, let alone grow.
Further, while there is a consistent cross-border theme of the requirement to have compliance policies and procedures, code of conducts and ethics, the regulations of one country can in fact be be difficult to implement as prescribed in another without infringing local law. With the risks of engaging in business in one country versus another differing, there is a mandate, either by law or reality, of totally differing attentions.
The problem is not just with those corporations where the law currently requires adherence to certain compliance regulations, but in fact bleeds over to the private arena. Where economic development takes the form of a private domestic company being ‘pronti’ for acquisition by a larger, and perhaps foreign corporation, there is no longer the luxury of time to bring yourself ready as a competitive target for acquisition or cross-border growth.
Juxtapose these factors with the cost of compliance, the dislike of management to absorb an additional burden of either assisting in risk assessment or implementing what they perceive to be yet another burdensome programme, and the overall impossibility of working in, or running a company in an environment of ‘fear’, corporations have, unfortunately tended to either use an ineffective ‘template’ which in the end will be found lacking and insufficient, or worse to ignore or postpone the inevitable reality of the situation.
Thus, the creation of SLS’s Global Corporate Governance and Risk Management Services.
For SLS, enterprise-wide risk analysis does not mean to attempt elimination or even merely mitigation of risk, but to calibrate strategic goals to desired levels of risk exposure. SLS seeks to design a programme for its corporate client that breeds a risk intelligent culture that, through concrete steps, permits the organization to define their risk appetite (vs. risk tolerance), and further, where people at every level are taught to, and feel comfortable with, managing risk as an intrinsic part of their jobs. Rather than being risk-adverse in principle, we help clients to understand the risks of any activity they undertake and manage them accordingly. These are all components of SLS’s programme relating to risk management where a critical component that we address is ensuring that our client’s directors and top managers operate without fear of the unknown, so that they can articulate their business strategy and the main risks that could drive tactical and strategic decisions in the near and long term. By helping the client in defining its risk appetite, SLS better enables the Board to clearly and regularly focus on the company’s strategic plan. Identifying the actual ‘risks’ that could affect the company’s plans or performance, positions the board to evaluate whether management has adequately capped those risks and whether other elements of the company’s operation need to be adjusted. While SLS’s programme for its client is designed such that it becomes management practices to address risk, SLS additionally develops a structure designed to map oversight responsibility, guide management in strategic matters and the importance of the diverse perspectives offered by a broader group in governance. SLS in fact designs a framework for its clients to ensure that the allocation of responsibility fits the client’s circumstances and addresses the spectrum of identified material risks that we come up with in our initial risk assessment. SLS understands that the quest for profitability must be in sync with appropriate risk parameters, and considers risk management exactly as the balancing of risk and reward to maximize profitability. That is in essence the province of the CEO, whose job we seek to make easier, and whose person we seek to protect in this ever-changing criminally charged environment. The Compliance and Ethics programme that SLS usually designs in a hyper-textual format bears in mind a goal of being over-inclusive yet simple, direct, uniform and effective such that the programme can be used not just on a company-wide basis, but globally, with a format easily allowing jurisdictional specific supplements where deemed necessary. While the SLS’s programme may have to be developed from scratch, as in the establishment of a start-up, it goes without saying that what may already be in existence to its effects would be carefully reviewed, re-utilized and integrated whenever this makes legal and economic sense. An analysis is made as to the most effective way from a human resource standpoint and budgetary issues of maintaining the operation of the programme. It is not the intent of SLS to design a programme wherein a corporate client finds itself dependent on others, or incurring an inappropriate line item of expense. Developing an end product that is affordable and efficient all the while maintaining effectiveness is paramount in SLS’s approach. The areas of regulations meant to be acknowledged include, but are not limited to U.S. law of corporate compliance and sentencing guidelines, the U.S. Department of Justice guidance, the SEC guidance, environmental protection agencies guidance, self-audit policies, guidance from multi-national administrative agencies, human services guidance, the USA Patriot Act, the Sarbanes-Oxley Act, the UK Bribery Act, the Foreign Corrupt Practices Act, various country’s stock exchange and federal acquisition regulations, and Italian Law nos. 231/2001, 262/2005 and 196/2003. The programme designed and suggested by the SLS’s Global takes into account the general theme of all such guidance, in view in particular of the legal position of U.S., Italian, Bulgarian, Serbian, Croatian and Romanian companies or subsidiaries. Further, SLS is in particular available to provide jurisdictional supplements with specific regard to doing business in: Albania, Armenia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, FYRO Macedonia, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, ant the United States.
The design and implementation of the programme used to be spearheaded by the Director of SLS’s Global, a former Assistant United States Attorney and ex-SEC staff member, admitted in mutiple US States and before the Supreme Court in the US, as well as in the UK and the EU. In the difficult current regulatory environment, SLS is unique amongst Italian law firms in affixing this credential to its final work product. The human resources devoted to SLS’s Global Corporate Governance, Compliance and Risk Management Services are lawyers and other professionals with a diverse range of subject matter expertise, and linguistic abilities. Further, with its broad range of offices globally, SLS stands ready to service a diverse jurisdictional client base.