Canadian Lawyer InHouse

LAW DEPARTMENT MANAGEMENT Why the general counsel's office may want to have better surveillance of compliance issues. By Jennifer Brown EYE When Mark Adams was promoted to the top legal job at AGF Management Ltd. in December, he assumed the reporting line for compliance in the organization. As vice president, general counsel, and corporate secretary, compliance issues now flow through to him. "We haven't merged legal and com- pliance in any respect but I am now over- seeing compliance as the general counsel," says Adams. "I am in the camp where I think they need to be distinct for it to really work well together." It can differ in various organizations — sometimes compliance and legal are separate while in other instances they can be morphed into the same department. Many argue it is a distinct skill set, but clearly as business units in a large orga- nization, because they are both on the risk-management side, compliance and legal often work together — or at least they should. Compliance and how it fits with the legal department in an organization is undergoing somewhat of a review in cor- porate circles these days. In part, it may be 34 • APRIL 2012 INHOUSE ON COMPLIANCE KEEPING AN due to the increase in regulatory legisla- tion and globally due to politics, but there are others. According to John Boscariol, leader with McCarthy Tétrault LLP's international trade and investment law group, there is a laundry list of things that should encompass compliance and the legal department should be aware of them and make sure senior management knows they are being monitored. He refers to this as "compliance convergence." Boscariol says compliance requires senior management commitment to drive it and there should be structured tools to help back it up including a compliance manual and guidelines. It also means hav- ing an authoritative senior officer respon- sible for compliance. From there, you need training and education for employ- ees, officers, board members, and busi- ness partners. A good compliance regime also includes internal audits, reviews, and investigations, covers voluntary dis- closures, contract reviews, mergers and acquisition due diligence, and the screen- ing of customers, suppliers, and all other business partners. Boscariol says where the convergence point comes is really about knowing who you're doing business with as supplier, customer, creditor, debtor, or what your product or technology service is used for and by whom. "It brings together issues like economic sanctions, export controls, anti-money laundering, anti-terrorism rules where you're going to be doing the same things, compliance-wise, within your organization to protect it going for- ward," he says. In many companies those areas are dealt with in silos. "There could be a clerk in the warehouse dealing with a customs broker and for anti-corruption it might be in-house counsel. Or economic sanctions might be handled by someone else and it can become quite costly and inefficient, quite honestly." Sound daunting? It definitely could be in the beginning. "It all comes down to information and that's where people fall down," says Adams. "It's not that people don't want to be compliant — they just aren't aware of certain things. Company footprints get large. I honestly

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