The Devil Is In The Details of Compliance: Get Down To Brass Tacks At The October 26 Compliance Readiness Seminar

Friday, September 1, 2006 - 00:00

In a 2006 survey conducted by The Metropolitan Corporate Counsel, its corporate counsel readers ranked compliance second among many subjects that are relevant to their work. Compliance training programs and compliance systems ranked second in importance among the many services, tools and technologies they used. And, the need for corporate counsel to have the staff and tools to meet their compliance obligations ranked second among the many issues to which corporate counsel wanted this newspaper to devote space. It is obvious that assuring compliance with laws and regulations, domestic and foreign, continues to be one of the most important issues of concern to corporate counsel.

Compliance is also often a very private affair. When details about a compliance program come to light, it is usually a description of a compliance weakness which contributed to a larger corporate problem or misstep. Few companies have been willing to provide details about their compliance programs, even those companies whose programs are among those considered best in class. One exception is General Electric.

In 2005, GE issued 'Our Actions,' a report detailing its corporate citizenship performance in a number of categories including compliance. In this report, GE moves beyond lofty statements about values and the importance of being a good corporate citizen and provides details about how its comprehensive programs make its commitment to good corporate citizenship a reality. With this report, we get a glimpse of the inner workings of a best in class compliance program.As we have come to expect, GE is trailblazing again, this time in terms of recognizing the value that can come from publicly demonstrating its commitment to good business conduct.

GE provides one example of how companies are approaching compliance today, but it is not the only approach and others are emerging. One thing is clear, 'checking the box' is no longer acceptable and companies are now working extremely hard to create highly effective compliance programs that give employees the information and tools to stay in compliance, and to comprehensively monitor the activities within the company to quickly identify issues.

Richard Breeden, Worldcom's Bankruptcy Monitor, laid out the principles to improve governance and compliance with laws and regulations in his landmark report 'Restoring Trust.' The report was a road-map for MCI, formerly Worldcom, to follow to incorporate the appropriate controls to assure its shareholders that the Board and Executive team were operating in their best interests. Mr. Breeden set a high bar for MCI, which presented Stasia Kelly, the then General Counsel of MCI, and Carol Ann Petren, the then Deputy General Counsel of MCI, a significant challenge. In a very short timeframe and at a reasonable cost, Ms. Kelly and Ms. Petren created a best-in-class compliance function. The MCI compliance story was on the cover of The Metropolitan Corporate Counsel 's September 2005 issue.Ms. Petren was recently named Executive Vice President and General Counsel of Cigna in Philadelphia.

Although many articles have been written and surveys have been published regarding compliance programs, most are more focused on theory instead of practice. What many compliance professionals are craving is the detailed insight from their peers as to how to really do it, what works and what doesn't, and where to begin. The Compliance Readiness Seminar at the University Club in New York City on October 26 (see agenda and details on page 24) will do just that. The program is sponsored by Kirkpatrick & Lockhart Nicholson Graham LLP and Duff & Phelps, LLC.

Following a morning session devoted to exploring the substantive legal and accounting issues affecting compliance, at lunch and in the afternoon corporate counsel leaders (including Ms. Kelly and Ms. Petren) and compliance officers from major corporations will share best practices on such topics as risk identification, risk ranking, reporting relationships, organizational design, budget, headcount, compliance education, and measurement of program effectiveness. The goal is to bring these in-house leaders together with compliance professionals for an exchange of ideas that can arm participants with real solutions that can be applied within their own organizations.

The October 26 Seminar will include breakout sessions which will provide the attendees with the opportunity to benchmark with each other concerning best practices and will conclude with a report that will reflect the participants views on best practices. This report will be published in the December issue of The Metropolitan Corporate Counsel .However, the best way to gain maximum benefit from the Seminar is to attend in person.