One of the most interesting presentations at the recent program on international corporate practice held at the Penn Club in New York on January 31 and February 1, 2008 was a panel discussion on the connection between international corporate practice and global corporate social responsibility. The speakers included Carole Basri, editor of a new PLI treatise entitled International Corporate Practice: A Practitioner's Guide To Global Success, which is reviewed in this issue of The Metropolitan Corporate Counsel .
Doing the right thing has been a corporate mantra since the days of President Theodore Roosevelt, but it has only been in recent years that the need for companies to integrate social and environmental concerns into their business strategies, both at home and overseas - and particularly overseas - has become an absolute imperative.
The speakers were unanimous in addressing the need for the effective implementation and monitoring of a universal set of codes and standards - starting with a global code of conduct - on the part of the company. That code of conduct is one of the essential components of international corporate compliance, a necessity for any company operating in the international arena given the globalization of the world's economy and the increasing applicability of U.S. law outside the country.
International crisis management also received considerable attention at the program. The most difficult problem during the initial stages of an international crisis is determining what actually happened and the extent to which it might affect the company's bottom line. As with corporate social responsibility, success is predicated on a uniform corporate culture and standards of conduct that do not differentiate among corporate headquarters and the various operations overseas.
The speakers were unanimous in pointing to the need to be attentive to the attorney-client privilege - and the significant differences between common law and civil law jurisdictions on the privilege - in addressing crises in the international arena.
The attorney-client privilege, in the context of the United States Justice Department's McNulty Memorandum's revision of the Thompson Memorandum, was also addressed by Norman Veasey, formerly Chief Justice of the Delaware Supreme Court and currently a senior partner at Weil, Gotshal & Manges, who recently testified before the Senate Judiciary Committee on governmental pressure on corporate counsel to waive the privilege. Chief Justice Veasey went on to talk about the role of general counsel/chief legal officer in the global corporate arena as a persuasive counselor. See his interview on our front cover.
The responsibility of general counsel/chief legal officer to educate the directors on the whole range of international corporate compliance and governance issues that derived from the company's participation in the international arena was the principal subject of Chief Justice Veasey's remarks.
He stated that he did not believe that it made sense for the independent directors to have their own counsel present in the boardroom at all times, that such a course was both divisive and needlessly expensive. If the board could not trust general counsel/chief legal officer to serve in a persuasive counselor capacity, he said, they should appoint a new one. He added that one of the principal responsibilities of the board was to encourage senior management to establish the proper tone at the top by setting clear expectations for corporate ethical behavior and the conduct of the business in compliance with the law, and that to do so the guidance of an experienced general counsel/chief legal officer was almost certainly necessary.
The increasing importance of corporate social responsibility, at home and abroad, he noted, was one of the distinctive trends in corporate behavior in recent years, and any company that failed to get in line with the appropriate standards was running an immense risk. Whence the need for a general counsel/chief legal officer with a clear understanding of the trends. Chief Justice Veasey concluded his remarks by stating that, being on the firing line as a consequence of being ethically and legally responsible to the corporation and its shareholders when conflicts arise was but part of the price that general counsel/chief legal officer must face in the age of international corporate practice.
The program was built around, and served to launch, Practising Law Institute's new treatise International Corporate Practice: A Practitioner's Guide To Global Success . For details on how to obtain a copy please see the review above.