Intercultural French-German Know-How: Compliance in general

“Compliance is a “must-have” if you intend to gain new shareholders and stakeholders properly and to leverage turnover”

Interview with Bénédicte Querenet-Hahn & Maria Lancri

What is the role of compliance in an organisation above the perceived cliché “compliance pointless burden”? How to deploy a compliance management system effectivity? Which support does a compliance officer need from the top management?  Bénédicte Querenet-Hahn & Maria Lancri, senior legal counsels and compliance advisers in a French-German law firm in Paris, gives us their practical answers and experience.

Waiting for incidents to implement a compliance management system might be an option but is certainly not a sustainable solution. The compliance scandals popping up in the press are obvious evidence that such damaging publicity and financial sanctions are painful for companies. Anchoring Compliance as a corporate fundamental lived out in the culture of the company is a tough but needed challenge to protect the company against risks and potential sanctions.

The interview has been conducted by Colline Jux and Chloé Saby from the Haufe Group.

Compliance in general

Bénédicte, you have 30 seconds to explain to the future CEO of VW as to why compliance is so relevant. What would you say to convince him?

Bénédicte: (Laughing) Do I have 30 seconds or 30 minutes?

You have only 30 seconds.

Bénédicte: I would tell him that it is necessary to prevent Compliance risks. Risk management contributes to the performance of the company and its competitiveness towards partners and clients.  Perhaps above all competitiveness, because if the company abides by laws and regulations it will give the appropriate guarantees to shareholders and attract new stakeholders seamlessly.

Many people are saying that compliance is a pointless burden putting the brakes on the performance of the company and its responsiveness on the market. What do you think about it: cliché or reality?

Maria: It is certainly not a burden if it is done properly. But if you don’t do any compliance-risk assessment by implementing a compliance management system and if you don’t take the proper corrective measures by involving the top management, you are encouraging the cliché of pointless compliance.

Anyway, questioning compliance as a brake by slowing down the performance of the company is quite outdated in my opinion. Nowadays, many public and private entities are stepping forward in the compliance dynamic. The standard is rather the introduction of a compliance program to ensure sustainable revenues. There will always be sceptical people criticizing the system. It is not due to compliance as a (wrongly) despised topic, but is instead due to human nature not being satisfied with the present and surrounding environment. Most of our clients at the CEO level confirm to us that compliance is a “must-have” if you intend to gain new shareholders and stakeholders properly and to leverage turnover.

How do you explain the current increase of compliance scandals in companies at the international level?

Maria: There was a real change in mindset towards increased compliance during the bumpy time of the financial crisis from 2007 to 2011 – and even more after the notorious compliance scandals popping up in the press: BNP Paribas, Volkswagen, etc. Each crisis has had some good consequences to make the system change in a more transparent way.

You work with many CEOs. From which type of companies do they come? Does the size, location, sector, etc., of a company really matter when you introduce a compliance management system?

Maria: The size of the company does not have a major impact on how compliant the entity must be. To put it in other words, budget, long-term integration, and tone from the top affect the organisation and its mentality for a real compliance system to a much greater degree than size. Some small companies may perform even better in their compliance deployment than big companies that may not push the topic at the right level and rhythm. Compliance requires resources. Surely, it is a cost centre for a company – but much less expensive than always incorrectly assessed or dreamed. Adequacy and operationality are core success factors for a sustainable compliance management system.