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
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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
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