Imagine a world in which organisations are measured by the implementation of their purpose instead of their turnover.

Today, only a small portion of the economy has a clear transformation purpose: helping organisations to walk, learn and unlearn over time to be lively, agile and generate a positive impact on their environment.

However, until very recently, all the efforts of these organisations were by their own initiatives, until today. With LeQuid, we have found a lever of change to help us accelerate this transformation, bringing together a constructed purpose and compliance with the law: Corporate Compliance.

Origins of Corporate Compliance

Corporate compliance was born out of the ‘70s in the United States after controversial corruption scandals were brought to light. After Watergate and other condemnable activities of American multinationals such as ENRON or WORLDCOM (later in 2001 and 2004, respectively) more ethical behaviour was demanded by pubic authorities and society.

As such, the Foreign Corrupt Practices Act was established, which for the first time required American corporations to have a “Compliance Officer” to ensure that these situations were avoided.

In Europe, Directive 2004/39/EC MIFID related to the financial instruments market, was one of the pioneering standards that gave rise to the role of the Compliance Officer.

This established the idea of self-control of the organisations themselves and the principle of self-responsibility.

Current scope of legal compliance 

From a legal perspective, society’s demand of a new business model has deepened in Spain with a regulatory catalogue that covers an increasing range of areas, some cases of which we will discuss:

  • Crime prevention to avoid criminal liability of legal persons – Organic Law 5/2010 and 1/2015 amending the Penal Code.
  • Money laundering – Act 10/2010 on prevention of money laundering and terrorist financing.
  • Data protection – Organic Law 3/2018 on Personal Data Protection.
  • Non-financial information – Act 11/2018 on Non-Financial Information and Diversity.
  • Corporate Governance – Act 31/2014, on Corporate Governance Improvement.
  • Public procurement – Act 9/2017 on Public Sector Contracts.
  • Act 3/2017 on Gender Equality, among others.

    La exigencia radica en tener un manual de prevención de delitos, un buzón de denuncias y una verdadera cultura de cumplimiento

Ethical compliance culture in business

The true innovation of looking at the law this way is that the requirement is not based exclusively on having a crime prevention handbook and a complaint box, but also that it is necessary for the organisation to have a veritable culture of compliance.

For us, this translates as the launch of three large inter-connected blocks.

The first is to review, improve and/or produce all manuals and protocols required by law to achieve Corporate Compliance and Corporate Governance in full compliance of the law.

Second is to improve workersexperience in terms of Corporate Compliance: understand and internalise the concepts and how they are applied in the workplace, actively participate in building a culture of compliance, and lastly, internalise the purpose of the organisation.

Third is to observe, adapt or re-design the mechanisms or points of contact that employees have with the legal structure. To improve the impact of Corporate Compliance within the organisation.

Risks of not adopting a corporate compliance model

When organisations adopt an effective corporate compliance model it allows them to avoid various risks that may arise from corporate activity, penalties ranging from fines, hiring prohibition, even the dissolution and liquidation of the company. Among the various risks, it also avoids those to do with reputation.

Advantages and opportunities of adopting a Corporate Compliance model

Instead of it being seen as an obligation or expense, organisations are met with a great opportunity because it allows them to:

  • Observe and (re)design the organisation’s purpose within the framework of the new paradigm of sustainability we are experiencing.
  • Show that the organisation is complying with ethical norms and laws through documents and methodologies.
  • Access the supply chain of large organisations and internationalisation.
  • Take on the Public Sector.
  • Access to new finance sources, such as Impact Investors and Ethical Banking, who only go for organisations seeking a positive and measurable impact along with financial return (environmental, social and good corporate governance aspects).

Accreditations, seals and certifications

Although Corporate Compliance seals or certifications, or those showing and measuring certain sustainable practices are not mandatory, they can be appreciated, as mentioned by the Public Prosecutor’s office, as an additional element to show the adequacy of the model, or be substituted as an alternative to a strict system of Criminal Corporate Compliance. They also allow for quick and effective accreditation that the company in question has an ethical culture of compliance.

Among them are specific certifications issued by AENOR (the Spanish Association for Standardization and Certification) based on UNE 19601 on crime prevention management and ISO 37001 on anti-bribery management.

Alternatively there are other seals such as: IQNet SR10 ​on social responsibility management, GRI​ on verification of sustainability reports or EA 0031 on risk management, of increasing importance as well as the B Corp or tools such as the Triple Balance from the SANNAS association, or the Audits of the companies of the Common Good.

Jose María Dutilh

Jose María Dutilh

Socio Director de la Firma de Abogados LeQuid, especializada en Derecho de los Negocios y de las Empresas Sociales, estoy plenamente convencido de que el desarrollo empresarial rentable y eficiente no sólo es compatible sino que necesita la ética empresarial. En la actualidad, desde LeQuid colaboro con empresarios que necesitan una segunda oportunidad a través de estos procesos; Apoyo legal en el día a día, Re emprendimiento socialmente responsable, Fusiones y Adquisiciones, Reestructuración y Refinanciación de empresas o Concurso de acreedores entre otros.

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