Page 16 - CCCA61_2007

NATL61_024-032 03/08/2007 09:37 AM Page 25 Cover Story ormer in-house counsel Kristine Robidoux clearly ushered in a new regime of civil liability for secondary market dis- remembers several not-so-pleasant experiences she closure in the securities markets. had with a senior leader of the publicly traded The direct result: as senior managers put greater focus than national propane gas company where she was ever on staying on the right side of the law, in-house lawyers Fworking a decade ago. now have the colossal responsibility to ensure their companies Every time Robidoux—who was responsible for creating and obey the far-reaching and complicated domestic and interna- implementing ethics and privacy compliance systems—would tional corporate regulations with which they must comply. approach the president of the operating company, the executive “People in senior management are turning primarily to their would make a big show of it, diving and hiding out of the way. in-house counsel and relying on them a lot to make sure the “It used to annoy me,” says Robidoux.“I didn’t like the message company is on the right side of regulation,” says Tina Woodside, he was sending to the organization—that legal and compliance head of the corporate finance department at Gowling Lafleur was an impediment to business.” Henderson LLP in Toronto and an expert in compliant disclo- Fast-forward to the post-Enron and WorldCom corporate sure systems. Compliance issues catapult corporate counsel onto key management teams world,and the story couldn’t be any more different.“Organizations Consequently, the reliance has boosted the prestige of the in- no longer view corporate counsel as an impediment. Now they house lawyer. Jordan Solway, regional vice-president, claims and want that guidance,and for legal counsel to be involved,not just at legal for Canada at Arch Insurance Group in Toronto, notes:“In the end of the process,but throughout.They understand that com- North America,there’s been a lot of discussion and debate regard- pliance is good business,”explains Robidoux,president of Calgary- ing the role of in-house counsel as gatekeepers of ethical conduct. based ComplianceWorks, a consulting firm that specializes in set- [We’re now] almost regarded as the chief ethics officers and we ting up privacy, ethics and corporate compliance programs and have more prominence in senior management teams.” controls for private and public sector organizations. The role has changed so substantially toward a more all- Robidoux’s story and subsequent observations demonstrate encompassing strategic adviser that Solway says a fellow in-house how important compliance has become over the course of the counsel described himself as being “joined at the hip with the last few years. Although the trend toward a more compliance- CEO,” adding that “the role of the general counsel in large based corporate world was already in the process, the Enron and organizations is now a crucial key role, whereas 20 years ago, we WorldCom accounting scandals “accelerated things,” says Tim weren’t given any prominence or respect.” Moseley, senior vice-president and chief compliance officer of CIBC in Toronto, who notes that the regulatory environment Ontario’s Bill 198 has since become “more intense.” Recent trends and developments in the area of compliance and disclosure are ensuring that the role of the in-house lawyer is Complex regulatory schemes becoming even more important to an organization’s well being. In the wake of the highly publicized major scandals in 2001-2002, A Canadian example, is the introduction into law on Dec. 31, the U.S. set the precedent with the wide-ranging Sarbanes-Oxley 2005 of the Bill 198 amendments to Ontario’s Securities Act.This Act (SOX),which established enhanced standards for all U.S.pub- new law allows investors to hold companies legally responsible for lic company boards, management, and public accounting firms. the accuracy and completeness of the information they provide. SPYROS BOURBOULIS plex regulatory schemes requiring corporations to meet a bevy of suits and personal liability when they make misleading disclosure As a result of the changes, senior managers face the risk of law- Other countries soon followed suit,putting into law various com- and/or fail to make timely disclosure. compliance and disclosure duties. For example, in Canada, Ontario’s Bill 198, with amendments to Ontario’s Securities Act, The subsequent effect on in-house lawyers is immense, as they MARS 2007 CCCA Canadian Corporate Counsel Association 25