Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50160
EDITOR'S BOX By Jennifer Brown INHOUSE Group Publisher: Karen Lorimer Editorial Director: Gail J. Cohen Editor: Jennifer Brown Staff Writer: Michael McKiernan Copy Editor: Katia Caporiccio Art Director: Bill Hunter Account Co-ordinator: Catherine Giles Advertising Sales Representatives Legal Suppliers: Kimberlee Pascoe Tel: (416) 649-8875 E-mail: kimberlee.pascoe@thomsonreuters.com Law Firms: Karen Lorimer Tel: (416)-649-9411 E-mail: karen.lorimer@thomsonreuters.com Sales Co-ordinator: Sandy Shutt Tel: (416) 649-8864 E-mail: sandra.shutt@thomsonreuters.com Canadian Lawyer InHouse is published 6 times a year by Thomson Reuters Canada Ltd., One Corporate Plaza 2075 Kennedy Rd., Toronto ON. M1T 3V4 (905) 841-6480. 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Registration #R121349799 To subscribe or change addresses Call (416) 609-5882 Fax (416) 649-7870 or e-mail Eman Aboelsaud at eman.aboelsaud@thomsonreuters.com RETURN UNDELIVERABLE CANADIAN ADDRESS TO: CIRCULATION DEPARTMENT One Corporate Plaza 2075 Kennedy Rd., Toronto ON. M1T 3V4 Indexed in the Canadian Periodical Index INHOUSE DECEMBER 2011/JANUARY 2012 • 3 www.canadianlawyermag.com/inhouse Combating the whistleblower bounty Association of Corporate Counsel annual meeting in Denver this past October. One session in particular, on the U.S. I Securities and Exchange Commission's new whistleblowing legislation, drew a packed room with standing room only. The topic is getting a lot of atten- tion and rightfully so, especially from Canadian in-house counsel as it may be moving into Canada, complete with financial incentives. The Ontario Securities Commis- sion announced Oct. 21 it was looking at a number of new enforcement initia- tives including the prospect of intro- ducing a whistleblower program, under which incentives and/or protection from retaliation might be provided to those who have information about mar- ketplace misconduct. If implemented, it would be a first for securities regula- tors in Canada. There are big question marks around how it would be funded and whether legislative change would be required. The SEC's whistleblower program provides significant incentives to bypass internal reporting mechanisms. It stipu- lates that if people voluntarily provide original information to the SEC that results in successful enforcement and monetary sanctions of more than $1 mil- lion, the whistleblower would be eligible to receive between 10 and 30 per cent of the amounts recovered. That's a signifi- cant incentive to report to the SEC and not internally first. So what are companies to do? David ncreasingly, what used to be U.S.- only experiences in law are creep- ing north. The differences between Canadian and U.S. systems were dis- cussed on several panels during the Kohlenberg, deputy general counsel, corporate development and finance law with TransCanada PipeLines Ltd., speaking on an ACC panel in Denver about Canadian securities regulations, noted many companies have invested in code of ethics hotlines for employ- ees to use, but what else can be done internally to get people to report to them first? The U.S. model provides greater incentives to bypass any inter- nal reporting mechanism. Another aspect of all of this, Kohlen- berg pointed out, is that the SEC whis- tleblower program includes foreign private issuers, such as TransCanada. Kohlenberg says it comes down to setting the tone at the top of the organization that misconduct is not condoned. At TransCanada, there are seven ways an employee can make con- tact in an organization to deal with misconduct. There is also an annual certification program to provide train- ing around corrupt practices and secu- rity regulation matters. Each employee who takes the program is required to say they understand the conduct policy and they aren't aware of any miscon- duct that should have been reported. In developing an internal program, Kohlenberg says set it up so you can show you have the engagement of exec- utives and directors; that you've done risk assessments and due diligence, and you have built trust in your employees so they feel comfortable coming to you. They have to feel some bond to the organization to report on any perceived misconduct. Do the work now. Don't wait for the OSC to make it more attractive for employees to call them first. IH Send your news and story ideas to jen.brown@thomsonreuters.com