business ethics unit VIII PowerPoint Presentation

12 — legalweek.com

In-house lawyer

6 March 2015

By Vern Pitt @VernonLegalWeek

Sugaring the pill

As in-house lawyers seek new ways to identify bribery and corruption,

Vern Pitt talks to Alyson Corrigan, global ethics director and

EMEAA general counsel at Tate & Lyle, about how

the challenges can be sweetened

legalweek.com — 13

R isk is not something for which legal professionals have much appetite, but as resources are squeezed in-house legal teams are having to manage the legal risks to their businesses in ever-more

imaginative ways. A study of general counsel published last month

by Nabarro found that 43% felt that their teams were under-resourced. It also discovered that 55% of those interviewed were housing secondees and, of these, 58% had increased their number of secondees over the year.

But Tate & Lyle seems to be an exception to the second rule. Despite having to deal with the legal concerns of around half of the company’s £3bn-turnover business, Alyson Corrigan, GC for Europe, the Middle East, Asia and Africa (EMEAA) – and global director for ethics – has just two other lawyers in her team, plus a contracts manager. While she can take secondees for specific projects, they do not constitute part of the regular in-house resources.

The only recruitment on the horizon is a lawyer to handle the company’s growth in Asia-Pacific, where its Speciality Food Ingredients business, which mostly supplies sweeteners and fortified ingredients, is expected to experience major expansion over the next few years. Hiring an additional lawyer is something Corrigan anticipates happening “within the next year or so”.

Corrigan’s small team must handle legal work for the business across four continents, dealing with a high volume of sales and distribution agreements each year. Meanwhile, Corrigan’s opposite number, Pete Castelli, GC for the Americas, has only four lawyers at his disposal. Both Corrigan and Castelli report to global GC Rob Gibber.

The introduction of the UK Bribery Act in 2010 has served to add to the potential legal pitfalls for businesses like Tate & Lyle, which employs around 4,500 people worldwide.

Sweet ethics So how can the company manage those risks without a large in-house legal team and just nine lawyers overall?

In Corrigan’s case, the answer has been to establish an ethics team across the business comprising 55 ‘ambassadors’, each of whom holds the role in addition to their other day-to-day responsibilities. They are tasked with training their colleagues in what to look out for to ensure that no legal problems occur. In turn, Corrigan also became the director of ethics.

“Most of the things that go wrong in companies aren’t where you have some very bad person stealing millions, it’s little things that lead to bigger things,” she says. “We take the view that if you get the message out there – educate your employees and make them aware of the issues – you will achieve/maintain an ethical business

culture, which will result in proper, mindful compliance because people will understand why it’s important as opposed to having 25 forms to fill out every quarter.”

Perhaps doing it this way means the business still runs risks: without a team having clear responsibility for compliance, might there not be a greater chance of breaches? “How has compliance alone worked for the banks?” asks Corrigan, referring to the recent Forex and Libor scandals. “There are many institutions, not just banks, that have hundreds or thousands of compliance people, but that hasn’t necessarily engendered a business culture that prevents or mitigates compliance failures.”

While she accepts there might be some risks in the ethics approach, she says that the legal team is ideally placed to act as a central point of contact on the issue because they know the business and are “very aware of where the risks are higher”.

“I think [an ethics and values approach to compliance] is a strategy I would advocate if you were starting out as a company,” she continues. “Don’t start by appointing 100 people to tick boxes. If you give staff the education and awareness then that’s a less risky route than relying solely on a compliance department in head office filling out forms on behalf of the business.”

Corrigan adds that there are “many studies” that show ethical businesses are able to improve their bottom line as well.

However, while she is adamant that the ethics and values approach run by the legal department is a good fit for Tate & Lyle, she does not advocate it for all businesses. “If you are dealing with a bigger company with many thousands of employees and third parties then it would be difficult to have [my] dual role because you would simply need more people on the ground,” she explains. “The dual role works because of the size of company that we are and thus the ability to know the business well and have regular contact with senior management and key employees.”

Tate & Lyle’s ethics ambassadors’ programme has been running since 2012 but Corrigan, who has been at the company since 1994, is aware that there needs to a steady flow of compliance information for staff across the business if this lighter resource strategy is to work.

‘If you get the message out there – educate your employees and make them aware of the issues – you will achieve/maintain an ethical business culture, which will result in proper, mindful compliance’

Alyson Corrigan, Tate & Lyle

2012-present – Tate & Lyle, general counsel EMEAA, global director of ethics 2000-10 – Tate & Lyle, deputy general counsel 1994-2000 – Tate & Lyle, company solicitor 1993-94 – London Transport 1993 – Together Limited 1988-93 – Linklaters, trainee and qualified solicitor 1983-86 – University College London (LLB Hons)

Alyson Corrigan CV

14 — legalweek.com

Moral app To that end, the firm is set to launch an ethics and legal compliance smartphone app within the next few months. The app, developed in conjunction with the Institute of Business Ethics, will provide employees with guidance on a range of business scenarios, from accepting gifts and hospitality to conflicts of interest. It takes staff through a series of questions to establish what to do to remain compliant with the Bribery Act.

Even though it is based on UK law, Corrigan expects it to translate to global operations well because the spirit of many other countries’ laws is broadly similar.

She says an app suits the nature of the business, making it easier for employees who travel a lot and are rarely in offices – such as sales staff – to get quick access to help and guidance should they find themselves faced with a difficult situation.

Corrigan adds that teams in countries where unethical practice is more widespread, sales teams that are isolated from the rest of the business and staff in recently acquired companies also present a high risk of non-compliance.

Although the 140-year-old Tate & Lyle unquestionably remains a major global business, it no longer refines the sugar – or makes the iconic Golden Syrup – that made it famous. That is now produced by Tate & Lyle Sugars, which was sold in 2010 to American Sugar Refining for £211m ($325m) but trades under the Tate & Lyle Sugars name. It was part of a steady divestment of many

of Tate & Lyle’s raw ingredients production and refining assets in recent years, and other segments have been sold off to businesses across the globe.

It is on these sales that Corrigan has mostly sought the input of lawyers from outside the business – she says that much of the day-to-day corporate law is done in-house because “it’s quicker, easier and cheaper”. Yet, despite a steady stream of M&A deals across multiple territories in recent years, the company does not maintain a formal legal panel. “We do have some very longstanding relationships,” says Corrigan, “but my criteria are expertise and the personality of the lawyer I’m dealing with.

“Given the law firms we employ, you expect expertise but what you want is someone who is commercial and you get along with. When you’re doing an M&A transaction you’re often stuck in a room with them until two in the morning.”

She explains that by ‘commercial’ she doesn’t mean someone who is focused on reducing their fees, but

someone who “doesn’t quote the law at you” – which she says is “intensely

irritating” – and is focused on finding solutions to difficult commercial problems first and foremost. She adds: “What you want them to do is say ‘well, you’ve got three options and in the circumstances I’d probably recommend option B’.”

No closed shop Such lack of commercial acumen is much less of a problem in the market now, she suggests, than when she was doing her training at Linklaters in the 1980s.

She says the people with whom she has those long-term relationships include lawyers at her old firm plus Reed Smith, Addleshaw Goddard, Freshfields Bruckhaus Deringer and Winston & Strawn among others. However, Corrigan believes her approach does not make for a closed shop where no new firms can work for Tate & Lyle. When asked how one might get on the company’s panel, she says simply: “We are very happy to see you and, if you have the expertise for the job and we think we could get along with you, we’ll hire you.”

Generally, she adds, when the ingredients giant works with new law firms, it is based on recommendations from existing legal advisers or members of the in-house team. She cites a recent Thai deal where she used a local practice on recommendation from a magic circle partner as an example of this.

Because she puts personal relationships at the heart of her purchasing strategy, Corrigan is a little more relaxed than one might expect about how she keeps on top of the company’s EMEAA annual external legal spend of between $5m (£3.2m) and $7m (£4.5m) a year. She says that while she will scrutinise monthly spending she is not keen, as some clients are, on pressing for fixed fees on work, adding that it is “incredibly difficult” for costs to be estimated that accurately. She just doesn’t want to find that partners have spent time doing work an associate can handle: “The lawyers you have built a relationship with don’t do that. I’ve had partners who have said ‘I’m too expensive for this meeting I’m going back to my office – call me when you need me’.”

It is unsurprising then that Corrigan says she is happy to take her business to the partners she knows, even if they move from one firm to another. Though she adds that she is mindful of whether they have the resources and backing to do the work she needs – for instance if they have moved from a magic circle firm to a much smaller practice.

The jury may still be out on whether Corrigan’s ethics approach to legal compliance is a successful one or if it will enable the global business to manage effectively the wide variety of risks it encounters, but it is clear that with a wealth of high-quality lawyers on her speed dial Corrigan has plenty of places to turn to for advice if it doesn’t.

In-house lawyer

6 March 2015

‘Given the law firms we employ, you expect expertise but what you want is someone who is commercial and you get along with. When you’re doing an M&A transaction you’re often stuck in a room with them until two in the morning’

Alyson Corrigan

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.