New Compliance Regulations in France and Proposals for Italy
Mila Vasile–Senior Associate, Baker & McKenzie Milan & Nadège Dallais–Counsel, Baker & McKenzie Paris
A piece of major compliance legislation is due to be passed in Europe this autumn: the long-awaited French anti-corruption and whistleblower-protection law, Sapin II. At the same time, in Italy, an updated piece of whistleblowing legislation for banks is under discussion in the Parliament in the form of Bill proposal no. 2208.
This paper serves to outline the central facets of the new regulations and proposals: whom they impact, why they are important and how companies can elevate their compliance programmes to stay ahead of the curve.
Complying in a Globalised Economy
There is no doubt that global compliance standards are converging, and with the growing scrutiny that comes from the constant availability of social media, ethics and compliance professionals often find themselves faced with a dual challenge: staying up to date and complying with regulations from multiple jurisdictions, whilst instilling a strong ethos that permeates through the business across all geographies.
Prudent ethics and compliance professionals would therefore be wise to pay attention to new laws and updates to existing regulations in any country in which they do business. This can seem a daunting task. There are a number of steps that can ease this process whilst advancing the firm’s ethics and compliance culture in a global context. Before we look at those, we present an overview of the new compliance laws in France and the proposed change for Italy.
What You Need to Know – a Snapshot of the Two Laws
Below we have provided a broad summary of the fundamental features of both laws; however, we recommend companies affected by these pieces of legislation obtain professional legal advice if they are in any doubt as to their implications on their business.
Further details of Sapin II in France can be found at: http://www.assemblee-nationale.fr/14/dossiers/transparence_lutte_corruption_economie.asp
Proposal Bill no. 2208 in Italy can be found at: http://www.senato.it/leg/17/BGT/Schede/Ddliter/testi/46411_testi.htm
What Should I Do Now?
Ethics and compliance professionals should first conduct an assessment of how the new laws will affect their company specifically, including exposure to potential corruption risks in Italy and/or France and the capacity for the company’s compliance resources to handle those risks. This should include a full audit of the company’s compliance reporting procedures and ‘whistleblower’ protection programme in all countries the firm operates in.
Whether your company is affected by the new rules in France and Italy or not, there are a number of steps you can take to ensure your company stays ahead of the curve:
1. Supercharge Your Ethics & Compliance Programme Effectiveness
Compliance professionals need to commit to core programme elements that improve their organisational culture. This can be done by clearly defining programme effectiveness and committing to using industry-leading best practices to improve organisational culture. To do so, ethics and compliance professionals must know:
- How to leverage the effectiveness of an E&C programme through its entire lifecycle
- Best practice approaches for implementing, maintaining and improving core E&C programme elements
- Specific ways organisational culture can make or break a programme and keys to supporting a healthy culture
2. Inspire Ethical Behaviour with a Fresh, Innovative Approach to Your Code of Conduct
A code of ethics is the foundational document of every company’s ethics and compliance programme—and one of the first pieces of information an employee reads. Because the code is a vital policy, true leaders make a commitment to regularly use fresh, innovative approaches to inspire employees to meet its standards. Getting the most out of your code requires:
- Learning the key steps to assess and build (or re-build) a code to ensure it is working hard for your organisation
- Understanding how to ensure that your code is fully enforceable under local laws (in particular by complying with the French specific implementation process) • Reviewing examples of cutting-edge codes and incorporating best practice elements
- Understanding the opportunities presented by interactive digital codes and how they can connect with and support other elements of your E&C programme
3. Engage Your Board with a Compelling Board Reporting Strategy
A well-executed board reporting strategy helps ethics and compliance programmes gain credibility and visibility while increasing board support and engagement. As part of your engagement strategy, make sure to use:
- Criteria to benchmark your current board reporting protocol against best practices
- Memorable and effective board reports
- Sample content and metrics from leading reports
4. Build a Strong, Defensible Third Party Risk Management Programme
As regulatory scrutiny and high-profile cases increase, compliance professionals need to be asking more questions than ever about effective management of third party risks. In order for you to stay ahead of these trends, you need to understand:
- The difference between a third party risk management approach that withstands regulatory scrutiny and one that does not
- Best-practice guidelines for auditing third parties
- Industry-leading frameworks to use to assess your third-party corruption risk
5. Stay Ahead of Emerging Workplace Behaviour Risks with Training and a Strong Whistleblowing Programme
Cultural and socioeconomic trends impact workplace behaviour—and behavioural risk. Skyrocketing social media use, changing recreational drug laws, use of personal mobile devices and a multitude of other security and privacy threats are forcing organisations to stay on top of their evolving risk profile. To stay ahead of the curve, and your employees, make sure you know:
- How to write and manage policies that mitigate organisational risk within a rapidly changing legal landscape
- How to successfully navigate differences in national and international regulations
- Fresh approaches for training employees on appropriate workplace behaviour, and strengthening a culture of compliance, both through physical awareness building (such as posters and banners) and also through your company’s intranet
- The role language plays in changing internal culture. For example, move away from negative expressions such as ‘whistleblowing hotline’, and instead use terms such as ‘Ethics Hotline’ or ‘Speak-Up Hotline’
6. Know how to Navigate the EU Regulatory and Cultural Landscape
As the new French law and Italian proposals show, ethics and compliance professionals across the EU, and globally, are faced with the challenges of navigating the complex maze of different laws and regulations, as well as the vast and inherent cultural differences across countries. To ensure your E&C programmes flourish in EU countries, you need to be aware of how to:
- Maintain programme momentum
- Deepen and mature your programme
- Ensure your programme stays ahead of the curve (steps 1 to 5)
Best Practices to Comply
The new French law and Italian proposals demonstrate the importance of paying attention to global compliance standards. In today’s globalised economy, operational boundaries can become quickly blurred, and companies must be wise to legislation that affects them in any country in which they do business.
Whilst meeting international compliance requirements is essential for any company, prioritising an organisational culture – from the top down – which promotes integrity, ethics and respect, and supports employees in good decision-making, brings benefits far beyond basic compliance.
How NAVEX Can Help
NAVEX Global provides speak-up or ethics (‘whistleblowing’) hotline services to thousands of companies around the world, helping employees, customers, suppliers and other stakeholders quickly and easily report potential ethics and compliance issues. Our hotline services also provide compliance professionals with the ethics & compliance data they need to inform their programme, making it easier to spot trends and take corrective action before minor issues become major.
For further information, visit: /products/report-resolve/hotline-reporting
About NAVEX Global, Inc.
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