Q&A with Bloomberg Law’s Alex Butler
Today we share an interview between CCI’s own Maurice Gilbert and Bloomberg Law’s VP and GM of Corporate, Tech & IP, Alex Butler. Alex chats with Maurice about the future of compliance and ethics programs and how Bloomberg’s new Corporate Practice Center can help in-house counsel manage a variety of functions quickly and efficiently.
Maurice Gilbert: How does Bloomberg Law’s Corporate Practice Center help corporate counsel?
Alex Butler: We developed the Bloomberg Law Corporate Practice Center to explicitly serve the unique needs of the corporate market. It integrates practical guidance, expert analysis, commentary, news, primary sources and practice tools on issues of vital importance given the multiple perspectives that lawyers in corporations provide. Developed with extensive input on content and structure from corporate counsel, the Bloomberg Law Corporate Practice Center enables attorneys to manage a variety of functions quickly and efficiently, such as drafting policies and form agreements, developing workflow strategies for their department and building and running effective compliance programs.
MG: What are some of the significant issues facing CCOs, Risk Managers, etc.?
AB: Ethics and compliance are major areas of focus for general counsel, with 74 percent of respondents rating ethics and compliance a top challenge according to the Association of Corporate Counsel Chief Legal Officers 2017 Survey. In that same survey, law departments reported having to handle an average of just under three internal and external compliance-related investigations in the past year. In the most extreme cases, departments are handling as many as 10 or more investigations annually. With a rise in compliance-related enforcement by regulators, compliance professionals in organizations need to stay apprised of best practices and latest trends.
MG: How do you see the CCO role evolving within the next three years?
AB: The role will only grow with importance, particularly as we see more and more compliance departments being incorporated into the corporate legal department. In many cases, the corporate compliance officer reports to the general counsel, if the general counsel is not already wearing both hats. Compliance, at the highest-performing corporations, has become an essential component of business operations, elevating the role of the company’s top compliance officer to board-level interactions.
MG: What do you see as the greatest business risks facing companies today?
AB: A compliance failure can cost a corporation millions – if not billions – in fines, as has been the case with several recent FCPA violations. Perhaps more importantly, however, these failures can cause immeasurable damage to a corporation’s brand and reputation. As we have seen with recent corporate scandals, restoring a company’s reputation in the marketplace can be a long, uphill battle, with no guarantee of success. Our news team, in one example, has extensively reported on the Volkswagen emissions scandal – both from a regulatory and enforcement standpoint and from a corporate governance and compliance perspective, exploring how better practices and procedures might have led to a different situation than the one presently facing the board, executive leadership, regulators, investors and employees.
MG: What do you see as the greatest regulatory risks facing companies today?
AB: Twenty-eight percent of respondents to the ACC’s survey indicated that they were targeted by a regulatory agency in the past two years. Government enforcement of compliance with laws and regulations has been amped up considerably in the past 10 to 15 years — particularly in the areas of anti-bribery and anti-corruption. Privacy and data security are also top-tier issues with new regulations and heightened compliance risks and burdens facing multinational businesses.
MG: How might Chief Compliance Officers, Chief Audit Officers and Chief Risk Officers prepare to face these risks?
AB: It all starts with a robust corporate compliance program. As Suzanne Rich Folsom, General Counsel, Chief Compliance Officer and Senior Vice President – Government Affairs at U.S. Steel, has written for us, “Corporate compliance programs, once found primarily in highly regulated industries such as financial services, have now become part of the internal management of most corporations. Such programs are a self-policing mechanism by which companies can avoid or mitigate legal liability. Implemented effectively, corporate compliance programs can manage risk and create value for the corporation. A corporate compliance regime is no longer an exception, but rather the rule for every successful company.”
Robust compliance programs, as Suzanne points out, can mitigate legal and reputational damage. The chief compliance officer needs to have complete, unfettered access to the executive team to ensure that compliance is made a key part of any business decision. That access must include clear lines of communication with members of the board and the relevant committees of the board tasked with handling compliance and risk issues. Only by elevating compliance issues to the top levels of the organization can corporations hope to instill an ethical culture. Legal and reputational damage can also extend to increased costs for the corporation through redirected executive time, fines/reserves and increased cost of capital or reduced valuations.
MG: How does your company help its clients mitigate risk?
AB: A world-class compliance program is proactive, and we provide the perspective and the tools for a high-level sustained compliance effort. The new Practice Center features comprehensive practical guidance materials, including overviews, checklists, annotated forms and documents and comparison surveys developed by attorneys at major U.S. corporations and their outside counsel. It incorporates compliance content authored by the in-house legal department at U.S. Steel Corporation, providing users with step-by-step guidance on benchmarking, building and maintaining a corporate compliance program, providing unique perspectives and tools for sustained compliance initiatives.
Further, at highly successful companies, compliance is closely intertwined with good corporate governance. Having effective systems in place to remain compliant requires an ethical business culture and a proper “tone at the top” that is communicated to the entire organization. Our corporate governance materials provide an excellent complement to our compliance content, allowing corporate and compliance practitioners to get a holistic view of effective business operations.
MG: What new service offerings does Bloomberg Law have in the queue for this audience?
AB: We continue to build out our practical guidance content across several areas of corporate law, including compliance, governance and legal department operations. Our annotated practical guidance is developed to be a handy “on the desktop” tool for in-house attorneys. Our outside contributors and expert editors provide annotations that enhance practitioners’ understanding of the nuances of each topic, from definitions to alternative approaches to warnings and caveats.
In addition, we are continuing to develop tools and analytics across all of our corporate content — tracking federal and state developments to provide corporate practitioners with the latest trends and analysis on important issues.
MG: Compliance departments are often asked to accomplish their work with limited resources… Do you see this situation changing any time soon?
AB: There’s certainly no compliance or legal department that would turn down additional resources. However, we are seeing a noticeable trend among our clients in that they are keeping the vast majority of compliance-related tasks in-house as opposed to farming them out to outside counsel. Developing compliance and ethics policies, monitoring compliance programs, running audits and risk assessments and training employees, among others, are being handled by the compliance professionals within an organization. All of these essential tasks are covered, in a step-by-step fashion, in our compliance materials, providing compliance professionals with the tools they need to continue to keep this work in-house.
Alex Butler is Vice President & General Manager of Corporate, Tech & IP for Bloomberg Law. In this position, he is responsible for the commercial strategy, growth and development of content and solutions exploring the intersections of technology, law and commerce for professionals in the legal and business communities. He can be reached at [email protected].