C H I E F L E G A L O F F I C E R (C LO) & C H I E F R I S K & CO M P L I A N C E O F F I C E R
With special thanks to Bjarne Tellmann, Senior VP and General Counsel, Pearson; and Jonathan Bamford, Head of Strategic Liaison, Information Commissioner’s Office for their contributions and support. THIS ISSUE
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• Creating a Tech-Savvy Legal Function
• Operational Execution
• EU General Data Protection Regulation
• Future Proofing
(GDPR)
Chief Legal Officer
WH AT I S A TECH-S AV V Y LEG A L FUNCTION? Creating a tech-savvy in-house legal function is not about technology, but about how to remain relevant at a time of exponential change. The corporate world can get fixated on the minutiae of technology –instead, it needs to concentrate on the philosophy of change. Change is an end in itself; technology is not. Technology is relevant only insofar as it is a tool of change.
Chief Risk & Compliance Officer
CRE ATING IN-HOUSE ‘HARDWARE’ • It is essential to identify the four or five core risks (weighted according to likelihood and their financial/reputational impact) before the in-house function can devise the right ‘hardware’ to repel them. This is more difficult than many assume. One example of such problems relates to General Motors (GM), where a ‘silo’ culture divided the GC from his staff and meant that the company’s in-house legal function failed properly to liaise with its technical departments over an ignition flaw before a vehicle recall was initiated in 2014, after an 11-year delay. • ‘Group thinking’ can also present an obstacle. Over time, this makes a pattern of thinking that is specific to a particular community ‘normal’ to its members, even if it contains blind spots. The group therefore becomes desensitised to threats and problems that an outsider unburdened by its acquired myopia would quickly grasp. • It is obvious, therefore, that companies need to ‘think outside the box’ to perceive core risk. In the absence of recruiting perceptive outsiders, they should ask their business contacts or the external lawyers they retain to lend them ‘fresh pairs of eyes’, so that their scrutiny can help to identify systemic threats at an early stage.
HARDWARE , SOF T WARE & TECHNOLOGY If an in-house function wants to meet the challenges of change, the general counsel (GC) must perfect the following instruments: • the in-house ‘hardware’ (the risk analysis and the organisational structure appropriate to countering the company’s main business threats); • the in-house ‘software’(the right departmental culture and the right people); and • the cost- and labour-saving technological tools that will help you to implement both the above.
BJARNE TELLMANN SENIOR VP AND GENER AL
CRE ATING IN-HOUSE ‘ SOF T WARE’ • Your ‘software’ are your people, who fight against your four or five core risks. • First, however, you must define the entity you are defending. What is your corporate ‘culture’, the untested assumptions that bind all your colleagues together, the unprompted beliefs that you share? • Ideally, your culture should accord with your stated company values, although often this is not the case. This is why firms such as Facebook, Yum! and Amazon meticulously screen out potential employees who do not share their ‘family values’, or ruthlessly dismiss them if they display ‘non-native’ ideas or behaviours once hired. • Once the corporate culture and the key risks have been defined, the staff who keep the business afloat are the ‘generalists’, who create and maintain your relationships with clients. • For each of the core risks, there should be at least one ‘specialist’. Each should have extensive specialist experience in the threat for which they have been hired. • Recruit permanent in-house staff to fill these posts, rather than contracting out the work to professional services firms. Their workers will invariably prove less knowledgeable about your business – and less discreet – than your employees. They will also be much more costly.
CO U N S E L , P E A R S O N 14
W I N M A R K C-S U I T E
Q1 2017