Compliance 2017 Compliance_2017 - Page 3

Corporate compliance annual report Avoiding the issue? Even some of Iberia’s biggest businesses are still not properly addressing the issue of compliance, yet lawyers sometimes face the challenge of convincing them that their reputation could be at risk – meanwhile, doubts persist about the wisdom of acting as external legal advisers to clients’ compliance committees There are still many companies – even among the largest market players – that have, as yet, failed to fully get to grips with the issue of compliance. And even among those that are taking the issue seriously, lawyers report that many are starting from scratch in terms of developing compliance programmes. While this suggests that law firms have an opportunity to cash in on what is a relatively untapped market, the problem remains that many businesses in Iberia are still not completely convinced of the need to be compliant. This is despite the fact that they are running the risk of severely damaging their reputation, or even worse, going out of business altogether. However, the most sophisticated companies are not only ensuring they are legally compliant, but they are now taking the next step and consulting lawyers on how to foster a culture of compliance within their organisation. Meanwhile, some organisations are setting up compliance committees – acting as an external legal adviser to such bodies is a potential source of work for lawyers, though when entering into such situations, it is important that they exercise considerable caution. As some lawyers warn, law firms that advise companies’ compliance committees need to ensure that they do not potentially leave themselves vulnerable to being held liable for any breaches of regulations by their client. There are many major companies that are only just beginning to address the issue of compliance, according to Ester Navas, partner at Baker McKenzie. “There are a lot of big companies that need to work from zero,” she says. Ontier partner Ramón Ruiz de la Torre says that, to effectively advise clients on compliance, it is necessary to have a “tighter relationship” with them, so as “to get close to your client and understand what they need”. He adds that, if companies are going to have a compliance programme, it is important that they comply with it, as if they do not, the consequences could be worse than not having a compliance programme at all. Culture of compliance Some large multinational companies, such as IBEX 35 companies, want to move from “compliance in only the legal sense and more to cultural compliance”, says Eversheds Sutherland Nicea partner María Hernández. For other clients, it is important for law firms to explain to boards of directors about “the value of a culture of compliance”. She adds: “For example, research has shown that companies that are declared ethical outperform the rest of their market competitors.” However, Hernández adds that it is not possible to completely eliminate all compliance-related risk. Baker McKenzie partner Cecilia Pastor says that a business that is not sufficiently compliant will lose business. She adds that when it comes to expanding into new jurisdictions, businesses that are not compliant with local rules and regulations often need to make the decision to not go into the market in question. Another concern for companies looking to expand abroad is that, while adapting their compliance programme to meet international standards, it is also important that local compliance risks are identified, according to Deloitte lawyer Borja Almodóvar. He adds that computer programmes are being developed th at manage compliance. According to Almodóvar, compliance officers need more visibility within companies. “Companies need to find a way to develop this visibility,” he adds. The concept of compliance is extremely broad and affects the functioning of businesses’ day-to-day operations, explains Ashurst Madrid managing partner María José Menéndez. She continues: “There is no single effective method of having good compliance, businesses have to be very vigilant and this can involve creating supervisory bodies.” Menéndez adds that organisations also have an opportunity to embed May / June 2017 • IBERIAN LAWYER • 39 >>