Page 29 - CCCA Magazine Summer 2014

{ FeatUre } When daniel desjardins was asked in 2005 to set up a global compliance department at Bombardier inc., the senior vice-president, general counsel and corporate secretary said he had a clean slate to work with and the choice of two models. He could set up a compliance department within legal that reported entirely to the general counsel or he could structure it so that compliance operated outside legal and reported to another senior executive. ne thing Desjardins knew was that “compliance doesn’t and compliance off cer, and asked them work in silos. It needs the support of many functions, in- about the upsides and downsides. ocluding legal.” “having a robust He settled on separating “police” from “prosecution” and compliance within the legal compliance hired a compliance off cer to help him set up the functions department program is so and processes needed to oversee the fast-growing international Wendy King, vice president, legal, gover- critical to good company, which now operates in 60 countries. nance & risk, at Capstone Mining Corp. governance. as Desjardins then transferred ownership of compliance to the in Vancouver, says, “There are advantages general counsel, head of internal audit, who reports up the chain ultimately to and disadvantages to both models and it governance the chief executive off cer. At the same time, he kept a dotted really isn’t one size f ts all.” falls under your line to the Bombardier Advisory Committee, a group of execu- mandate.” tives that includes himself, the chief f nancial off cer, and the More effi cient and less costly Wendy King, VP, heads of public affairs and human resources. King, who held the chief compliance of- legal, governance The committee meets quarterly with the head of compliance f cer title in her last role at a credit union, and risk, Capstone to review complaints, training, internal certif cation and other explains “size is a factor.” Creating sepa- Mining Corp. compliance issues. “It’s a great forum to debate strategies and rate departments and reporting lines in a where we want to go on compliance,” Desjardins says. “The legal smaller organization “is cost prohibitive team is there to support what’s coming…so we can plan accord- and there really isn’t a need to have them ingly with compliance. In terms of investigations, legal supports separated.” She adds, “There is a signif - the compliance off cer. It works well for us and makes sure that cant overlap in skill set and knowledge of compliance is well integrated. It gives it great visibility.” the chief compliance off cer and general With a decentralized legal department comprising 175 law- counsel.” yers operating in 17 jurisdictions, Desjardins had the luxury that many general counsel in smaller operations don’t have: to sepa- Better collaboration rate legal from compliance. That separation helps avoid issues of She says another advantage is having compliance and legal conf ict or concerns about which hat internal lawyers wear when working closely together at an early stage interpreting new leg- advising companies—especially if they carry the dual title of chief islation and regulations, and discussing how best to work with compliance off cer, which an increasing number of lawyers do. business units to ensure compliance. “I think you get a stron- ger, better quality compliance program. Having a robust com- pliance program is so critical to good governance. As general “compliance doesn’t work in silos. It needs the counsel, governance falls under your mandate. The functions support of many functions, including legal.” are closely tied.” Daniel Desjardins, SVP, GC and Stephen Sigurdson, senior executive vice president, corpo- corporate secretary, Bombardier Inc. rate affairs, and general counsel at Manulife Financial Corpora- tion, adds his organization leans towards the chief compliance However, as Desjardins acknowledges, there is much debate off cer reporting to the general counsel because of the need for about which model is best. “Some feel they can manage this un- partnership and collaboration between the two functions. “It’s der one single function and others believe it’s better split, de- rare that a compliance issue doesn’t have a legal element, and it’s pending on who you are and what’s your business. There’s no rare for a legal matter not to have a compliance element.” perfect answer on this.” He says the role of general counsel should be to engage in So what are the pros and cons of each model? To spur debate risk mitigation and ensure the company follows the spirit of law about this topic, CCCA Magazine canvassed in-house counsel, not just the letter of the law. By having integration with compli- including some who hold or have held the dual titles of lawyer ance it allows for better collaboration. Canadian Corporate Counsel assoCiation | CCCa-aCCje.org 29