Udow General Counsel of RELX Group (Reed Elsevier)

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WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

GUEST OF HONOR: Henry Udow General Counsel of RELX Group (Reed Elsevier)

THE SPEAKERS

Henry “Hank” Udow Lodewijk Hijmans Chief Legal Officer & van den Bergh Company Secretary, RELX Group Partner, De Brauw Blackstone Westbroek

Julian Long Erik Belenky Creighton Condon Managing Partner (London), Partner, Senior Partner, Freshfields Bruckhaus Deringer LLP Jones Day Shearman & Sterling LLP

(The biographies of the speakers are presented at the end of this transcript. Further information about the Directors Roundtable can be found at our website, www.directorsroundtable.com.)

TO THE READER General Counsel are more important than ever in history. Boards of Directors look increasingly to them to enhance financial and business strategy, compliance, and integrity of corporate operations. In recognition of our distinguished Guest of Honor’s personal accomplishments and of his company’s leadership as a corporate citizen, we are honoring Henry Udow, General Counsel of RELX Group, with the leading global honor for General Counsel. RELX Group (formerly Reed Elsevier) is a global provider of information and analytics for professional and business customers across industries. Its activities include scientific publications and LexisNexis. His address focuses on key issues facing the General Counsel of an international corporation. The panelists’ additional topics include governance; media; and diverse corporate transactions, including mergers and acquisitions.

The Directors Roundtable is a civic group which organizes the preeminent worldwide programming for Directors and their advisors, including General Counsel.

Jack Friedman Directors Roundtable Chairman & Moderator

Mr. Henry Adam Udow, also known as At Cadbury, he served as General Counsel Hank, has been the Chief Legal Offi cer and and Secretary, from September 1991 to Janu- Company Secretary of Reed Elsevier Plc (now ary 1994, Assistant Secretary from September RELX PLC) and Reed Elsevier Group Plc 1990 to September 1991, Division Counsel (now RELX Group plc) since March 2011. from September 1987 to September 1991 and Vice President from September 1990 to Mr. Udow has acquired substantial experience January 1994. managing global legal and M&A departments at Cadbury Limited (formerly, Cadbury He started his legal career as a Securities and Schweppes Public Ltd. Co.). He served as M&A Lawyer at Shearman & Sterling in the Chief Legal Offi cer of Cadbury Limited New York and London. Henry “Hank” Udow (formerly Cadbury plc) from July 1, 2005 to Chief Legal Offi cer 2010 and served as its Group Secretary from Mr. Udow served as a Director of Dr Pepper/ & Company Secretary September 28, 2007 to 2010. He worked Seven Up, Inc. since March 2, 1995 and 23 years with Cadbury. He served as Group Relx (Investments) PLC since 2011. M&A Director of Cadbury since 2000 head- ing up all merger and acquisition activity. In 2009, the National Law Journal named him as one of the 20 most infl uential general Mr. Udow served as Vice President, Secretary counsels in America. and General Counsel of DP/SU Acquisition Inc. He joined Cadbury in 1987 as Legal He holds a Juris Doctor degree from the Counsel for the U.S. beverages business and University of Michigan Law School and a bach- served as its Senior Vice President, Legal elor’s degree from the University of Rochester. Director and General Counsel of Global Beverages Business since 1994.

RELX Group Through its Elsevier scientifi c, technical and It provides comprehensive data and analytics medical information business, it provides sci- to the insurance industry, which allows them to entists, researchers and health professionals more accurately price policies. It provides fi nan- world-class content, analytics, and decision cial institutions with risk management, identity With over $10 billion in revenues and a tools that enable them to make critical deci- management, fraud detection and prevention, market capitalization of about £37 billion, sions, enhance productivity, and improve credit risk decisioning and compliance solu- RELX Group is a world-leading provider of outcomes. It owns ScienceDirect, the world’s tions, including Know Your Customer and information and analytics for professional largest electronic database of peer-reviewed pri- Anti-Money laundering products. It also pro- and business customers across industries. mary scientifi c and medical research, as well vides data and analytics to U.S. federal, state, as publishing fl agship scientifi c and medical and local law enforcement and government RELX helps scientists make new discover- journals such as The Lancet and Cell. agencies to help solve criminal and intelligence ies, lawyers win cases, doctors save lives, and cases and to identity fraud, waste and abuse in insurance companies offer customers lower Through its LexisNexis business it is a leading government programs. prices. It helps save taxpayers and consum- global provider of information and analytical ers money by preventing fraud, assists law tools to the legal profession. It is well-known Reed Exhibitions is the world’s largest exhi- enforcement and government agencies with for its Lexis.com and LexisAdvance electronic bitions business. It hosts over 500 events a data and analytics, and helps executives forge legal research databases. Other offerings year around the world, including the real commercial relationships with their clients. include Shephard’s Citation Service, Matthew estate industry’s leading event, Mipim; The Bender, Halsbury’s, Tolleys, Butterworths, London Book Fair; World Travel Market; RELX operates in four major market seg- JurisClasseur and Law360. Paris Photo; and New York Comic Con. ments: Scientifi c, Technical & Medical under the Elsevier brand, Risk & Business Analytics Its Risk & Business Analytics business is a lead- The Group is headquartered in London, under the LexisNexis Risk Solutions and Reed ing provider of solutions that combine public serves customers in more than 180 coun- Business Information brands; Legal under the and industry-specifi c information with analyt- tries, and has offi ces in about 40 countries. LexisNexis brand; and Exhibitions under ics and decision tools to assist customers in It employs approximately 30,000 people, of the Reed Exhibitions brand. more accurately evaluating and predicting risk. whom half are in North America.

JACK FRIEDMAN: It is a pleasure to welcome everybody this morning. I am Jack Friedman, Chairman of the Directors Roundtable. We are privileged to present the world’s leading honor for General Counsel to Henry “Hank” Udow of the RELX Group this morning and thank him very much for giving his time and sharing his wisdom.

We are a civic group whose mission is to organize the finest programming for Boards of Directors and their advisors globally, which includes in-house lawyers and law firms. We have never charged anyone to attend more than 800 events over 25 years. Directors have told us that corporations are rarely credited for the good they do. They encouraged us to create an opportunity for executives and General Counsel to speak about the activities of their corporations and law departments.

The format for this morning will start Here is the text of the letter: While Hank leads by example, he also has with Hank’s presentation, followed by the shown a great interest in helping students Distinguished Panelists each introducing a On behalf of all of us at the University of pursue career paths that are very different special topic for discussion. Finally, there Michigan Law School, I extend heartiest con- from his. He has been very supportive of will be a Roundtable with all the Speakers gratulations to Hank Udow on receiving the the Law School’s mission to train lawyers to and interaction with the audience. After World Recognition of Distinguished General serve the public good, and he has stressed this event, the transcript will be made into Counsel from the Directors Roundtable. the importance of helping young lawyers a full-color document which will be made find careers about which they are truly pas- In his current role with RELX Group, Hank is available electronically to about 150,000 sionate — whether it be in a publicly traded leaders globally, including three-quarters of managing incredibly complex problems in a company or a public defender’s office. all the in-house counsel in the world. time of unprecedented change. His success in doing so is, of course, impressive. But what Hank exemplifies the high standards to which Our Distinguished Panelists today are also is admirable about Hank is the manner the University of Michigan Law School holds Lodewijk van den Bergh, with De Brauw in which he does it. Hank demonstrates its graduates. He is incredibly talented, well- regarded, and committed to giving back to Blackstone Westbroek in Amsterdam; sincere passion for his work, and he exudes his community. He is the embodiment of a Julian Long, the Managing Partner for calm confidence despite the enormous lawyer who does things the right way. London of Freshfields Bruckhaus Deringer; pressures that he faces. At the same time, Erik Belenky, of Jones Day in Atlanta; and despite his busy schedule, he has been a Congratulations, Hank, and thank you for Creighton Condon, the senior partner of wonderful ambassador for the University of representing us so well. Shearman & Sterling, from New York. Michigan Law School. He has participated Dean Mark West, University of Michigan in alumni activities in the U.S. and in Europe, Law School We have a special surprise for Hank today. and he also has taken the time to speak with He graduated from the University of students on campus. He has the increasingly Congratulations! Without further ado, I’d Michigan Law School. The Dean of the Law rare gift of devoting his entire attention to like to invite Hank to give us his opening School has written a letter of congratulation the conversation at hand, whether it is a address. Thank you. to include in the transcript. The Dean’s student asking for career advice or a dean assistant hand-delivered the vellum-printed thanking him for his philanthropic support. HANK UDOW: Good morning, and letter last week to London so that Hank He is a wonderful role model for students thank you, Jack, for that very kind intro- could have a personal copy. and alumni alike. duction. I also need to say thank you to

describe some of my thoughts in terms of The first illustration comes from our what I see with respect to the intersection scientific, technical and medical business, of law and technology. I’m going to do this Elsevier. I call it the “Googleization” from the perspective of a General Counsel of the world. It is the widespread appeal of of a business which is a global provider of the populist sentiment encapsulated in the information and analytics to professional following simple and short sound bite: “In customers and businesses — RELX Group — today’s technologically advanced world, all which is a $35 billion market cap business. information should be available to all people We’re headquartered here in London, but instantly — and, by the way, for free.” We can somewhat unusually, we have a dual-headed Google anything in seconds, and it is free. structure, so we have both publicly listed British and Dutch parent companies which As an aside, I do find it interesting that every- jointly own the business. Many of you will thing provided by the world’s most profitable know us as the owners of LexisNexis, which company is free. It has revenues of $75 bil- primarily serves the legal community with lion and operating profit of $17 billion. How legal research, information, and analytical does that work? It turns out my parents were tools. Some of you will know us as own- wrong — money really must grow on trees? ers of the Elsevier scientific, technical, and Or, perhaps in reality it is just a reallocation medical publishing business and publisher of how we all pay for this information. you and the Directors Roundtable for this of journals such as The Lancet and Cell. very nice and totally undeserved honor, and Others will know us through our risk and This “everything should be available to for arranging and moderating this morn- business analytics business, which com- everyone, instantly, for free” argument is ing’s event. I’m honored and truly grateful. an example of what I call an asymmetric Thank you to all of you for joining us this bines one of the world’s largest public record debate: issues where one side of an issue, morning. It’s great to see so many friends databases and industry-specific information and colleagues. Hopefully, we’ll say at least with proprietary analytics and decision but not the other, can neatly be summed one or two things this morning that you tools that enable businesses and other up in an easy-to-understand, facially appeal- find of some interest and relevance. customers to more effectively evaluate and ing but simplistic argument. A sound bite: manage risk. And to round out the picture “Build a wall across the U.S.-Mexican bor- Before I start, I also need to say a special of RELX, we also own Reed Exhibitions, der” and “Stop all Muslims from entering thank you to our host, Julian Long and which is the world’s largest exhibitions busi- the country.” With these few words, appar- Freshfields, for having us here, and to the ness, holding over 500 events a year around ently one U.S. presidential candidate will panelists, who Jack’s already introduced the world, including the London Book Fair, end terrorism, unemployment, and sexual — Julian Long of Freshfields; Creighton Paris Photo, and New York Comic Con. violence in the U.S. As we all know, these Condon of Shearman & Sterling; Lodewijk are complex, multidimensional issues with van den Bergh of De Brauw Blackstone From my vantage point, I find this to be an neither an easy nor a single answer. Yet, Westbroek; and Erik Belenky of Jones Day, incredibly exciting time to be a lawyer. We’re simple sound bite arguments seem to find who I truly appreciate having taken the time seeing what I could call almost a revolution an ever-growing and accepting audience. and the travel efforts to get here. So thank in the law as it tries to come to terms with you very much for that. the rapid advances in information-related In the scientific, technical, and medical technology — the digital age in which we research community, we see this populist And that is very nice, Jack, about the find ourselves living today. This is the age, sentiment for instant access to all informa- University of Michigan. I didn’t know as Deming put it: “In God We Trust; all tion for free, in the form of something the about that; I’m touched by it. others, bring data.” policymakers call “Open Access.” Open Access generally refers to online research I was going to start by just saying, “Let me I happen to be very fortunate to be in a busi- outputs that are free of all restrictions on make some brief remarks,” but every time ness that is affected by, and even at the center, access and free of many restrictions on use I do that, it reminds me of Franz Kafka’s of these intersections of law and technology. such as certain copyright and license restric- great quote, “A lawyer is someone who In my brief time this morning, let me just tions and literally require no payment from writes a 10,000-word document and calls it mention three illustrations of these intersec- the reader to view and use. Many policy- a brief.” So, instead, let me just ask you to tions, to give you a taste of why I think this is makers and others have quickly extended indulge me for about 20 minutes or so as I such an exciting time to practice law. this to conclude that given technology

today, like Google, there is no longer any Publishing today in fact, continues to create enormous value cost to publishing scientific or medical research and are introducing legislative pro- and, despite — or more accurately, as a result of — technological posals based on this belief. The problem is advances, requires substantial investment. In short, it does not however facially appealing this argument is, it ignores many facts. come for free. — Henry “Hank” Udow

Publishing today, in fact, continues to cre- it searchable, making it quick and easy is money,” too many of us find the allure ate enormous value and, despite — or more to find, and then moving from just creat- of the sound bite argument to be too much accurately, as a result of — technological ing pdf copies of printed articles to fully to resist. And even more unfortunately, in advances, requires substantial investment. interactive articles enriched with incredible issues of such great public importance as In short, it does not come for free. functionality that never before was possible. scientific and medical research, this includes For example, rather than simply read some- legislators and policy-makers. Creating peer-reviewed journals, which pro- one else’s work, today a researcher can — in vide assurance of “quality control” within real time, as they analyze the article — view My second illustration of how the intersec- the research and academic communities, and manipulate as they wish a 3D model of tion of law and technology continues to create requires assembling and overseeing appro- the brain, a cell structure, or anything else exciting and cutting edge debates today relates priate peer review panels (with researchers that may be the subject matter of the article. to Intellectual Property, and in particular, and academicians who have both appro- Or, again in real time, they can import their copyright. We thought Napster and the music priate skills and credentials); experienced own data into the models set out in the industry might have resolved those issues in professional editors with appropriate edito- article they are reading and study the vary- the context of the digital age years ago. Along rial boards providing editorial supervision; ing results. Or, they can export data from comes Google — and boy, were we wrong. maintaining appropriate dispute resolution the article they are reading into their own and retraction processes to allow challenges models and study those outcomes. Or, they Google went out to a number of Universities to and the formal and fully communi- can in fact create and experiment digitally and copied millions of volumes of work, cated retraction of work that is ultimately with almost any chemical combinations and in their entirety. At least for those of you determined to have been falsified or which see the results, without the risk of blowing from the U.S., you may remember that time subsequent to publication has been deter- up the lab (and themselves). when posted around all Xerox machines in mined to have not satisfied accepted offices were the large notices reminding you scientific research methodologies. And, very In short, incredible interactive functionality that before you wholesale copied materials, importantly, to create and maintain a defin- has been added to research that allows it to you should ensure you were not violating itive and trusted repository of all work so be used and manipulated in an infinite num- the author’s copyright. a researcher knows, with confidence, that ber of ways — ways that were not possible when they read an article published 10, 20 or even dreamed of when they were simply Apparently, according to the U.S. 2nd or 40 years ago, they are reading the final, static printed pages or even just uploaded in Circuit Court of Appeal’s recent decision, peer-reviewed published journal article and pdf form to electronic platforms. which the U.S. Supreme Court refused to not an early, and perhaps erroneous, draft review last month, Google need not heed manuscript. The importance of this “cura- All of these tools have allowed researchers such warnings. Not even when copying mil- torial” function cannot be over-estimated to become much more efficient, much more lions and millions of volumes of work. In as it has been an essential element in the prolific, much more productive. But all of fact, over 20 million non-fiction works, to progress of scientific and medical research this requires huge investment. It requires be precise, were copied in their entirety. over the decades. concerted effort, constant innovation, and significant financial investment. It does not I will spare everyone a lengthy discussion Of course, all of the above value is contrib- come for free. about the fair use test under Section 107 of uted to the “content” of the research. That the U.S. Copyright Act or the Three Step is before any of the huge investment that is Of course, this side of the debate is hard Test for copyright exceptions and limita- made and continues to be made in the tech- to reduce to a simple sound bite. It takes tions under the Berne Convention. And, I nology that has made the ability to find and time to explain, is complicated and abstract. am not necessarily going to argue whether work with content so much quicker, easier In short, it requires effort to engage with it. the 2nd Circuit’s decision is right or wrong. and richer. Putting all this material into Hence, the two sides of the debate are “asym- Ok, yes, I am going to pretty much argue an electronic format, indexing it, making metric.” Unfortunately, in this age of “time it was wrong, but it is a prime example

of the challenges that those of us in the repository of public records in the U.S., and publishing and information business are as such, we hold a lot of personally identifi- facing as the courts and, ultimately, legis- able information. Our customers include the lators around the world, try to adjust legal insurance industry (for whom we provide a frameworks to account for this digital age. I comprehensive set of claims data on insur- think many of us would have thought that ance applicants); financial institutions — our the mere reproduction of copyrighted works products help them comply with their Know in their entirety without the author’s per- Your Customer obligations, as well as with mission would violate copyright law. But is anti-money laundering regulations; and gov- the storing of these works on a small sili- ernments, where we provide solutions to con chip somehow different than the Xerox combat tax refund and benefits fraud and copying of them? Has somehow the law products to support law enforcement. simply changed by decree of the 2nd Circuit such that copying is no longer a violation The ability to verify identity, analyze, and of copyright but it requires “re-display” of in particular identify links and associate the work before it becomes a violation? disparate data with individuals and entities Because it requires something more to has allowed businesses and governments to access all this material that is sitting on a more effectively identify risks and, in many silicon chip, is this “scanning” of it some- cases, more precisely price risks. This in The extent of an individual’s right to pri- how different than copying it on a Xerox turn brings greater economic efficiency. For vacy versus a society’s need for effective law machine? Or, has the technical capability to example, Julian Long, with a perfect claims enforcement and intelligence/anti-terrorism be able to take all these works, and through history, no longer underwrites part of Hank efforts entails complicated arguments on machines make an index of them and make Udow’s insurance premium (who has both sides. Yet technological advances — the them searchable, created something so new failed to disclose to the insurance carrier iPhone 5 and 6 for example — have forced and different that it gives substance to the his numerous past insurance disasters and this issue to once again be joined here and concept mentioned in this case and some resulting claims). In the U.S. auto insur- now. It is not going to go away. other earlier cases of “transformative fair ance industry, this more accurate pricing of use”? Or, as also noted by the courts, is it a risk has resulted in auto insurance premi- Surely the answer cannot be that people’s pri- matter that the ability to be able to do so is ums decreasing for 75% of those insured. vacy in their smartphones is inviolable under such a narcotic that the courts have deemed all circumstances, nor can it be that one busi- this to be a public benefit of such value that However, this efficiency comes with a cost — ness or one industry can dictate the terms of the traditional four-factor fair use standard a lot of information on individuals is held the boundaries of privacy rights as they relate is now really a one-factor test based almost and therefore is at risk of mis-use. We oper- to electronic devices. However, something entirely on public interest? And, if so, has ate in a heavily regulated environment, but about the current technological framework anyone given much thought to the impact still hardly a month passes without someone within which we are living today has caused this might have on authors or on the value announcing a data breach of some sort or this debate to tap into a deep vein of emo- chain of creativity and authorship? The another. Businesses therefore put in place tion across the world. Is it a reaction to mass consequences may well be profound. I can all manner of cybersecurity measures to governmental intelligence agency surveillance say with a degree of certainty, however, that secure the data they hold. RELX for instance programs? Or is it that our phones and tab- they are not well-understood. devotes substantial expert resources and tech- lets, even more so than our computers and nologists to nothing but developing policies, laptops, have become extensions of ourselves, The third and final intersection of law and procedures, and internal controls over our our inner souls, revealing our most intimate technology that I would like to touch on is information security practices, and then inner self? I am not sure. privacy. Of course, concerns and legal rights auditing those procedures and controls. around individual privacy have been around What I am sure about is that the traditional for a long time. However, cybersecurity con- Those controls often utilize encryption methods. tension between privacy and personal and cerns have given new impetus to the debate. societal security is having a profound effect Again RELX finds itself intimately entwined And then comes Apple and its outright on businesses in the information solutions in many of these issues, particularly in refusal to cooperate with the FBI to unlock and data analytics fields. The expectations our public records business. Our Risk & the iPhone belonging to the shooter in the of our customers and data suppliers and Business Analytics business is the largest mass attacks in San Bernardino, California. the regulatory landscape are both changing

rapidly, and for now at least, not necessar- HANK UDOW: Boards have a real role ily rationally. For example, regulators and to play when it comes to cybersecurity, legislators appear to be demanding notices but it is similar to the role that they gen- about cybersecurity breaches be provided to erally have, which is to ensure that there consumers promptly — within 72 hours in is appropriate oversight and governance the recently enacted Dutch statute, for exam- of cybersecurity issues in the business; to ple, and even sooner, such as 24 hours, in ensure that adequate resources are allocated some other laws. to cybersecurity matters; to ensure that management is appropriately focused on The problem is that within that time period cybersecurity, and to challenge the overall following discovery of a breach, a busi- robustness of the cybersecurity program. ness almost certainly will not understand Then, essentially, the Board should get out the extent of or the facts surrounding the of the way. There’s a real move among reg- breach. Computer forensics takes time ulators to prescribe how Boards should be and skill to perform. Yet well-intentioned involved in cybersecurity. It is just another regulators seem currently willing to sacri- on their growing list of very specific topics fice accuracy or meaningful disclosure in they have now added to the obligations of exchange for speed. How, as a business, Boards. There is a trend among legislators we respond to this, and what reputational these simple, easy to understand, but not and regulators to become more prescriptive impact it will have with our customers, is a particularly efficacious, solutions that are in requirements for Boards. This appears to serious challenge. being proposed and adopted but rather to be another being added to that list. move the discussions to be more robust, Similarly, most statutes and regulatory meaningful and effective. The concern with that and, frankly, the gen- requirements today tend to refer to a eral trend of legislators and regulators, is business having “adequate” or “appro- As you can tell, I think this is a remarkably that Boards are invited, almost encouraged, priate” cybersecurity safeguards in place. exciting time for the legal profession, partic- by that approach to adopt a tick-the-box Historically there has rarely been any defi- ularly as it relates to how we adapt our legal kind of culture. That is: “Okay, if I have nition to what is considered “adequate” or frameworks to accommodate ever-evolving all of these requirements, now that they’re “appropriate.” More recently, some regula- digital technologies. But at the same time, actually explicitly spelled out in a regulation tors and legislators have started adopting it is incredibly important for the legal com- or statute, or in a regulator’s memorandum, proposals to mandate data be “encrypted munity to step in and help steer the course if I cover off exactly those items, then that at rest” — meaning the data you hold on of dialogue about these issues away from is what I need to do limit my liability and your servers be in an encrypted form while asymmetric, overly simplistic and facially potential exposure.” it sits there. While this may give a sense appealing arguments and toward a much of additional security, in many cases it more thoughtful, oftentimes more uncom- The problem is, as soon as you cause provides little real additional protection if fortable, but ultimately more thorough and Boards, or even Management, to have to cybersecurity criminals have hacked into engaged debate. spend their time focused on making sure your systems. To be able to work with data, they tick specific boxes, you’ve, in some anyone holding that data needs to be able Again let me thank you very much for this form or fashion, absolved them of the to un-encrypt it. If hackers get in to your tremendous honor and for the chance to be broader responsibility to step back and say, system to steal the data in the first place, here with you this morning. “What do I need to do in my organization there is a high likelihood that at the same to create a culture of compliance, or a cul- time they will locate and extract from your JACK FRIEDMAN: Thank you. ture of attention to cybersecurity?” Every system the encryption keys. Hence, encryp- organization is just going to be different; tion at rest is often not the most significant Hank, in this area of cybersecurity, there are all they’re going to have different cultures; element of a cybersecurity program. kinds of issues for Boards to consider, and it they’re going to come from different starting reflects also on the general question of the role points. The most important thing a Board We are living through a period where law- of the General Counsel as advisor interacting can do — and it relates to cybersecurity as yers dealing in the world of information with the Board. Could you comment about equally as other areas — is to step back and solutions and data analytics have a critical the Board’s role, and also something about say, “This is an important issue; we need role to play in helping the world to resist how Boards may be treated by regulators? to focus on it; we need to be sure we have

the right resources; we need to be sure Management is focused on it; but we need to do it in a way that actually creates a culture within the organization supports this activity as being critical to what we do.

JACK FRIEDMAN: In the cybersecurity area, what is the relationship between EU level and the national level of regulating the type of issues that you were just raising? In the States, it’s basically federal issues, so we don’t have that problem. Could you tell us if this is all a Brussels negotiation and issue, or is it country-by-country?

HANK UDOW: At the moment, it’s much more a member state-based issue. Inevitably, you will see it become more and more on the agenda of the EU, as well, because it impacts customers or consumers across borders. We are currently living through the abolition of the EU/U.S. Safe Harbor provisions, and the attempted estab- lishment of the new Privacy Shield, so the responsibility for programming the car as a litigator; became an M&A lawyer; then EU is clearly very focused on privacy con- in the first place, in terms of is it priority moved to London, with the law not far cerns, and I think it likely over time this to spare the lives of the occupants of the behind him. He then jumped ship in 1987 will naturally extend to cybersecurity issues. vehicle, or others? If there’s a sole occu- to move to Cadbury, and the rest is history, pant in a car that’s about to crash, is it and he’s been a good client since. JACK FRIEDMAN: What are other programmed to do what it takes to allow aspects of the impact of future technology the survival of that sole occupant, at the My topic this morning is governance and on developments in the law? expense of the crowd of pedestrians on risk, including in M&A deals. Where I’d the side of the road? Does it matter if that like to start is to talk about risk — how HANK UDOW: Artificial intelligence crowd of pedestrians is a group of children companies are dealing with risk, and how clearly is going to be one of the next fron- at a school bus stop? Who is making those they structure themselves around risk, and tiers, which is going to throw up legal issues; determinations, those prioritizations? what Boards are doing. I will then talk a in particular, for instance, ownership issues. little bit about how you translate that into To create artificial intelligence requires huge That’s the next frontier. Those are going the M&A world, and what sort of risks amounts of content. Who owns that con- to be incredibly difficult issues to come to are taken in M&A transactions and maybe tent? Who owns the output of the artificial terms with. a little bit of the disconnect between how intelligence program? Who has the right to much attention is paid on a regular basis, use that output? Who has rights over how it JACK FRIEDMAN: Thank you. I would as a company, to risk, and the processes is used? We as a legal community have not like to continue with some panelist remarks, around risk, and what practically you can yet spent much time contemplating those starting with Creighton Condon, who will do in an M&A deal. kinds of ownership and rights issues with introduce his own topic. respect to artificial intelligence. Starting with the point of risk — risk, of CREIGHTON CONDON: Sure. Good course, is fundamental to good business. Another area that’s related is driverless morning. It’s obviously a pleasure to be The key is to understand what risks are you cars. As a concrete example of a use of arti- here, and thank you, Jack. It is great to taking, and hopefully make an informed and ficial intelligence, they are going to throw be here to honor my good friend and former sound judgment on the amount and types of up incredibly difficult liability issues. Who colleague, Hank. Hank was a Shearman & risk that are appropriate, and ideally — obvi- is responsible for the accident? Who’s got Sterling lawyer from 1983 to ’87. He started ously — avoid catastrophic risk as part of that.

Ever-increasing regulation, some of which are in place now at companies — and com- Hank was just talking about — in relation to panies really almost have no choice but to cybersecurity, for example — is designed implement best practices — best practices to ensure that companies have the right have become ever more onerous and diffi- processes and procedures in place, both to cult to comply with. A fundamental point be able to identify the risk, and then also comes down to an understanding of one’s to have the right information to make rea- business and the risks of that business, and soned judgments on those risks and which to make sure that the Management and the ones to assume and how to cabin the risk. Board are focused on those risks and have the information to assess them. Legal risk is everywhere. The FCPA, that particular U.S. construct, remains the Strictly as a legal matter, that’s all that’s major corruption-fighting tool in the world, required, of course. Without getting into the and has resulted in enormous exposure for technical legal standards, it is very difficult companies worldwide. VimpelCom is an for a Board, absent conflicts of interest or a interesting recent example. They paid $800 complete lack of processes in place — even if, million in fines — this was announced in as suggested by the case law, you don’t always February — and now have the pleasure of follow those processes — to face legal liabil- of Ireland; Estonia Financial Authorities; having an independent monitor for the ity, certainly in the U.S., and I think more Spanish Financial Authorities; the Latvian next several years, who will be all over broadly. So the issue is not so much the legal Financial & Capital Markets Commission; their business. It is a good illustration of exposure as it is the exposure for a compa- the UAE Securities & Commodities what’s going on globally in this area — in Authority; the Banking Commission of the ny’s business, its reputation, the reputation some respects, this is a fantastic business Martial Islands; and the Gibraltar Financial of the Directors and the time, attention, and model for governments. The companies Services Commission. Those are the ones distraction that companies come under when have an obligation to self-report. Once they they specifically mentioned in their release. they are under regulatory scrutiny. self-report, the government says, “Go out But it gives you a sense of just how much and hire some very expensive advisors; do a focus and how much coordination is going As lawyers are often asked for advice on deep dive; come back to us and tell us about on around the world, which is startling and what’s the right governance structure for the problems you found; and then we’ll tell obviously different than it was five or ten a Board in connection with the current you how much to pay us.” It’s almost better years ago. That’s without mentioning China, environment — and really, to Hank’s than taxes in that respect. obviously, which has its own anti-corruption point — our advice is first you have to drive going on, in which multinationals are understand what your risks are, what your Obviously, regulators around the world are a particular target and have a lot of scrutiny. culture is, what your Board looks like, what aware of that, and there is of course the real- skills you have and don’t have; and then ity that corruption is bad for business and Add to this myriad examples in different you can figure out what sort of structure you so on. It’s a policy matter. If you want to industries and with different problems: have. You should understand the industry read an interesting piece, you should look BNP’s $9 billion fine for sanctions vio- and the strategy, the geographic scope; third- at the release from the SEC on VimpelCom lations; Olympus’ problems on the party relationships, including suppliers and to get a sense of what’s going on. It cites anti-kickback fines; Volkswagen’s emission agents; ownership structures sometimes assistance from the DOJ, not surprisingly, problems getting a lot of headlines; and mul- are quite important; and potential conflicts in the U.S.; the Dutch authorities, also not tiple cases involving insider trading, price of interest in the executive compensation surprising, since almost half of the fines fixing, accounting fraud, and recent issues structure. If you have a handle on those were paid to the Dutch Authorities; the IRS; with cybersecurity. Putting aside, obviously, things, you can construct what needs to the Department of Homeland Security; the all that the financial institutions have been be, in almost every case — although guided Norway Financial Authority; the Swedish going through, including this week’s reversal by examples that you can draw from, from Prosecution Authority; the Attorney General of the dismissal of the LIBOR cases by the other companies. You really need to design of Switzerland; the Corruption Prevention U.S. Court of Appeals, so that will resurface. something that’s specific to your particular & Combating Authority of Latvia; the BVI company, and that includes what sort of Financial Services Commission; the Cayman How does governance align with these committees you have; how big your Board Islands Monetary Authority; Bermuda problems, and what’s effective and what is; and all the issues outlined above that Monetary Authority; the Central Bank is not effective? For all the processes that might impact on structure and process.

spend time — testing the tone at the top, talking to the Compliance folks, talking to the General Counsel, get a sense of what sort of risks are out there and how they are thought of and how they are approached. But the bottom line is that you can’t really get to a full level of comfort.

From a buyer’s perspective, we’re seeing a couple of things. One, we’re seeing more caution around that issue, generally speak- ing. But also — and this is probably the most important thing beyond taking the steps that are sort of reasonably available in the context of M&A transactions, in terms of diligence — is just to be absolutely open with the Board as to what you’ve done; what you think the risks are; the fact that you can’t fully assess the risks because you’re It certainly should be on the agenda for might be assuming when you’re buying a not running the company. As much as you Boards and appropriate committees to get particular company. You may obviously have may have done, you’re going to continue regular briefings from Management. It’s particular insight to the extent the business to have exposure. Have the Board get that important and critical, really, for Management you’re buying lines right up with the busi- input and be part of the record of what they to understand that one of its key roles is to ness that you’re in, so that you come at it assessed. At the end of the day, M&A is get the kinds of information that the Board with a certain level of understanding. about pros and cons. Do you do an M&A needs to be able to assess the risk. transaction? Do you grow organically? There are certain areas where there are pretty What’s driving the transaction strategically? But equally important — and, again, Hank tried and true procedures in place for due It is part of this analysis and also important mentioned this — is not to micromanage. diligence. FCPA is one. While you can’t be from a records point of view, that the Board That’s not the Board’s role; the Board’s role sure that you will not have an FCPA prob- understands what’s been done in the area is really to understand what processes are lem shortly after you buy an entity, you can of risk analysis. in place; what’s the culture; what’s the tone go through an intelligent process to assess from the top. How does the compensation the FCPA risk, what we call a red-yellow- I would not have wanted to be the Nokia system interact with the level of risk toler- green process, to identify risky types of management when the Siemen’s FCPA ance in the type of business that you have? business within a particular target, or risky problems arose between the signing and the To have separate sessions as a Board, not geographies and the like. closing of their transaction, but Nokia had a just with the CEO and the CFO, but with very good record as to what they had done in the General Counsel and the Compliance You can do some work around privacy that transaction. They ultimately restructured folks and so on, so that you have an under- issues, some work around cybersecurity. the transaction in a way which was favorable standing that these kinds of risks are being We’re seeing a little cottage industry growing to Nokia, but it was a huge headache. assessed and managed at all levels. up around those issues, not too dissimilar to what grew up around environmental 25 or The bottom line is, that was not something Think about all that, and how intensive 30 years ago, when environmental became that was discoverable in diligence, and that that process has become at public com- a hot topic. But having said that, you take is just a prime example of the kinds of risk panies, and then think about the M&A all of those things that you can do in dili- that you take in M&A transactions, given process. Gone are the days, largely, of doing gence, and you line those up with what you the regulatory market. deals over weekends, but we’re not that far do as a company around risk assessment, away from it. Now it may be a month or and the bottom line is you cannot get to the JACK FRIEDMAN: Thank you. Hank, two, where you do more diligence, clearly. same level of comfort in a company you’re what is the enormity of money, time, and As part of that, there is diligence around buying that you have with your own organi- education that a company like yours puts compliance and risks and so on that you zation. You can spend time — you should into their compliance efforts?

HANK UDOW: Most people who are Let me begin with a tautology by a famous involved in organizations will appreciate that American baseball player: that predicting is it’s difficult, first off, to total up all the time, hard, especially when you’re talking about effort, and money spent on compliance, for the future. But try, we must! a very simple reason: it has become so per- vasive at this point that, in the first instance, 2015 was, by all accounts, a record year in most large organizations will actually have a terms of dollar volume of M&A. I think set of resources that are loaded to compliance; Bloomberg’s estimated it at about $4.3 tril- they will have a Chief Compliance Officer lion, which surpassed the numbers in 2007, and a staff of Compliance people doing com- which was the previous high. pliance activities, promulgating policies and procedures, and training. But that, in some There are a lot of reasons that fostered that respects, only scratches the surface, because type of environment, including a low-growth you can only do so much in any large-scale environment, which encouraged acquirers multinational organization from the center. to seek out growth revenue where develop- What you’re really trying to do is to provide ing that organically was challenging. Low some standardization, and minimum stan- interest rates persisted, so borrowing money dards, and guidance, essentially, to all your was relatively cheap; and stable equity mar- businesses and all your people, about compli- kets made stock a very viable currency for a ance activities. Then what you’re trying to do lot of acquirers. is ensure that in all of your business activities there is an element of compliance activity that HANK UDOW: Well, it’s actually inter- The record numbers don’t necessarily paint takes place as a standard operating procedure. a full picture, and it informs where we are So it pervades, at this point, everything we do. esting and true — again, take cybersecurity as an example — we firmly believe that if today. Activity varied greatly by deal structure, by economic sector, by geography. The We don’t just sign up a new customer any- you have truly world-class cybersecurity pro- highlights for strategic buyers, for example, more. The days of just signing a contract cesses, procedures, and controls in place, were very different than those for private with a new customer that says, basically, “I’m it can be a competitive advantage. Because equity — and by that, I mean there weren’t selling you this; you’re paying me this; and the people you deal with — your sources a lot of highlights for private equity buyers the contract is terminable on such-and-such for data, your suppliers — actually are very in 2015. We saw a lot of consolidation terms, full stop,” are long gone. Now, before concerned about the reputational impact on in pharma, in telecom, and portions of you can sign up that customer, you are doing, them, as well as the legal liability, should technology, and then a rapid retraction in no doubt — and it’s not the Compliance team, there be a breach of your systems that con- generally; it’s the sales people, or somebody in tain information that came from them. energy and those involving commodities, the organization that’s entering into the con- They want comfort that if they’re going to where they were literally ravaged by a shock- tract — who’s doing some level of compliance supply this information and data to you, ing decline in oil prices. activity. For instance, there is the due diligence that you have good controls in place. that the U.K. Bribery Act or trade sanctions The BRIC countries which everybody legislation requires you to do. Is there any con- As a result, all the expense, time, and effort talked about as the new frontier for M&A nection with Syria, for example? And believe you put into your cybersecurity efforts actu- range from stable, in the case of China me, when you’re doing transactions with, for ally becomes a competitive advantage for the and India, to utter turmoil, for Brazil and instance, financial institutions, that is not an business, because if we do this better than Russia, which were effectively off-limits due easy question to answer. It’s become embed- our competitors, we’re going to use it as a to political crises. Amazingly, the number ded in almost everything we do, and it’s just selling point to our data suppliers.” of deals declined in 2015 over ’14. So, you added a level of complexity and obviously cost have these record dollar volumes, and yet a to what you do on a day-to-day basis. JACK FRIEDMAN: Erik Belenky will be decline in the number of deals. our next speaker. JACK FRIEDMAN: The General Counsel In part, that’s because we had a lot of really can tell the Board, “The investment you’re ERIK BELENKY: Thank you, Jack. I’m big deals — there were almost sixty deals making, collecting data internally, can help going to talk about the state of M&A, and over $10 billion — so that inflated the dol- us run our businesses better, because it echo some of the comments and issues that lar volumes. There are probably some other tells us more about our customers.” Hank and Creighton highlighted. things going on. The question is, where does

that leave us today? The low-growth environ- In sum, M&A is an important part of the ment is a powerful incentive to doing deals, global economy; that will never change. and it is hard for companies, especially Whether ’16 is bigger than ’15 is entirely public companies, to stay out of the M&A inconsequential; it’s only interesting to markets. There are some changing macro people who do this for a living. What is issues today over 2015 that began, really, clearly the case is an increasingly complex in November of 2015. For example, equity and challenging environment. It is critical markets were not as stable; the markets for for counterparties and their advisors to non-investment-grade debt really dried up, carefully analyze the specific factors that will and they’re pretty tumultuous, even today. encourage or potentially derail transactions. That impacts M&A volume. JACK FRIEDMAN: Thank you. Let me But there are a couple of other factors that ask you this: How does the changing envi- I’d like to spend a little time talking about ronment and regulatory situation affect the that are very meaningful today, and will likely relationship of attorneys and their clients persist. One is regulatory scrutiny of corpo- and deals? One issue right now is, how is rate transactions, which can be characterized anything kept a secret if the hackers can as a very muscular enforcement of antitrust come in and start stealing from anywhere? and foreign investment regimes. This mani- fests itself in a number of ways, ranging from ERIK BELENKY: I’m going “A” and downright rejection of transactions, such as then leave! the EU’s rejection of the UPS–TNT merger; the recent U.S. regulatory rejection of the There can’t possibly be a national security JACK FRIEDMAN: There’s the whole Baker Hughes–Haliburton transaction. It’s issue.” But they did review it; they ulti- question, as soon as you hear the word not only rejection, though, but requiring mately approved it, but it shows increased “M&A,” you know there’s got to be infor- remedies that are very broad, that are very willingness to look at deals that were mation held close to the vest, not only for difficult. The trend in both the United States previously off-limits. legal but because the prices can be affected and in the EU is to require divestitures of if it got out. entire business units, as opposed to discrete Another important factor, and this is kind assets. That’s a very meaningful develop- of the theme of the day, is risk, and really, ERIK BELENKY: In terms of regulatory ment, and impacts the way parties look at risk profile. Since the Great Recession, there scrutiny, it’s really the same answer for transactions. The period of time that it takes has been a change in risk profile among both regulatory scrutiny and changing risk to review a transaction has gotten longer, so companies. That’s not a bad thing, by the profiles. It requires companies and their that’s also an important factor. way, but it’s obvious. It’s not just because counsel to get that much closer. It is actually there are issues like cybersecurity which a good thing; it’s a challenge; it’s a positive What we have seen is an increased willing- raise relatively new risks; they’re difficult to development, because lawyers and GCs — ness, particularly when looking at foreign detect, but potentially catastrophic if there’s inside and external counsel — spend a lot of investment regimes — and I focus primarily a problem. But the margin for error is so time talking about adding value. One way on the United States, but we see this around narrow now, and this is the double-edged you do that is potentially through billing the world — an increasing willingness to look sword of the low-growth environment phe- arrangements. I’m not sure it’s the end of at transactions that are not necessarily in nomenon. It motivates people to do deals, the story but it hits closest to home. security-related industries. For example, last but it also shrinks that margin for error. year, the U.S. reviewed Chinese insurance But look, M&A has become an intense company Anbang’s proposed acquisition of Anecdotally, a lot of us who do deals see exercise in risk analysis, whether it’s work- Waldorf Astoria. It was ultimately approved, that. My own experience is we see a lot of ing with clients to identify antitrust or but when that was announced — and we deals that are terminated once you make regulatory risk generally, or helping them call it our CFIUS regime, the Committee it through the due diligence process, and strategically identify risk. There used to be a on Foreign Investment in the United States that’s because the client decided, “Well, day when we would produce 100-page due — when CFIUS announced that they were we’ve identified this issue; our margin for diligence memos that no one would read — reviewing that transaction, people looked error is narrow enough, we’re not going to and in our experience, those days are over. at each other and said, “What’s going on? go forward.” It raises a valuation problem. We are very focused on strategic reviews of

targets, and in issues like antitrust, helping these three issues and not all ten.” That cre- a client work through the process, and eval- ates the most value, in my view — billing uate remedies, and approach these matters arrangements included. strategically. It actually creates an opportunity to create value in the general M&A Establishing that kind of relationship ties process, and requires companies and coun- into the other point about conversions — sel to work more closely together. I’ve never been a big believer in panels, because I think most people would actu- CREIGHTON CONDON: I would say ally exercise their panels more by exception that we’re seeing two other trends that than by observance, and therefore have impact the relationship between companies never done formal panels. Rather we con- and their counsel. One is what I call con- tinually work to reduce the number of firms vergence. A lot of companies in the last 15 we work with to try and create deeper rela- years adopted a panel structure and they had tionships with a few key firms. large panels with lots of different providers. A lot of those companies are now going JACK FRIEDMAN: Our next speaker is back — and I’d be interested in Hank’s view Lodewijk van den Bergh. on this — and taking a hard look at that structure and trying to limit the number of LODEWIJK HIJMANS VAN DEN firms that they work with. That leads to the BERGH: Thank you very much. I’ll make second point on this, which is it’s increas- some general comments on the different ingly important for lawyers to understand perspectives of in-house lawyers and outside their client’s business. As part of that, what counsel. By way of background, I’d been you’re seeing is the increase in focus by law a practicing attorney for twenty years when models of law firms have not really changed; firms throughout industries. We have seven I became General Counsel and a Board I believe that is at our peril. It’s not so core industry groups, for example. We do a member of the international retail company much about fee arrangements, but more in lot to provide information to partners and Royal Ahold. Royal Ahold is not active in relation to the leverage model that law firms associates around what we’re doing in those this country, but has over 3,000 stores in operate under. Do we have a blind spot for industries, what’s going on in those indus- the U.S. and in Europe. the rapid technological changes that you see tries. Being able to come at legal issues with in businesses? an understanding of the business is becom- First of all, Hank, congratulations on your ing absolutely expected from clients. well-deserved award. The other point I’d make is about infor- HANK UDOW: I fully endorse that. The gist of my comments, really, will be mation and costs. You said information Where the most value add in the relation- that as a General Counsel, you need to have is for free. As a retailer I would say that ship is, is with firms who know our business both broad and deep knowledge about what people — clients, customers — expect almost and know our culture, and how we work. you’re doing. You’ve demonstrated that very anything to be for free or at least at very There is no more value creation between a well in your introductory comments. Two low prices. You see it especially in eCom- law firm and a client than can be generated points spring to mind. First, one of the merce, driven by technological changes and when a law firm knows, instinctually: with comments you made at the start of your talk customer preferences. It is not easy to make a client, when they’ve asked a question, are related to the rapidly changing environment a profit and there is a race to the bottom they looking for a quick verbal answer? Are of the business, and how that affects your in terms of pricing. Look at Amazon. The they looking for a short email response? Or business. I completely agree and saw that same holds for a company we bought when are they looking for a real in-depth legal at Ahold. I was at Ahold in the Netherlands, called analysis of the issues? When you create that “BOL.com,” also a non-food eRetailer. It’s relationship where the people you’re work- However, having returned to practicing law just very difficult to make money. At the ing with just understand that, and then also about three months ago, I noticed — and I same time, plenty of choice at low prices is understand how you think about issues and was just talking to Erik about it before the exactly what the customer expects. So the how you think about risk, and can say, meeting — how little actually seems to have question is, where does the business model “Actually, I know the three most important changed in law firms. Perhaps we can talk of the future lead us to? Surely, not every- things to this client are really going to be a little bit about the fact that the business thing can be for free.

Turning then to in-house and outside coun- For example, rather than simply read someone else’s work sel and how they can work together better: I think there is a real difference in perspective. today, a researcher can — in real time, as they analyze the article — view and manipulate as they wish a 3D model of If you look at the difference between outside and in-house counsel, think of a big and the brain, a cell structure, or anything else that may be the multi-layered cake, and then imagine taking a piece out of that cake and stepping into the subject matter of the article. — Henry “Hank” Udow void. What you see is an outside counsel’s view of a company. An outside counsel has deep knowledge about the legal issue he or that as well — is sometimes lonely. Most of the biggest was around risk management, she is advising on. But it’s only a piece of the of us in private practice don’t always realize a topic Hank mentioned, and perhaps the cake, and thus gives a limited perspective. As that. We have partners to go to for a chat, slightly wider topic of governance, risk, and in-house counsel, you are in a different posi- or we can pick somebody’s brain, or we can assurance. It’s not something outside coun- tion — you sit on top of the cake. put our feet up on the table and have a glass sel and law firms get involved in very much. of wine and talk about an issue. However, But at Ahold — and I guess at many other Whereas the outside lawyer is specialized when you’re on the Management Board or companies — it was a significant topic. I — and let’s be fair, is hired for a specific in a General Counsel position, the buck had never really appreciated the scope and job — be it M&A, litigation or an inves- actually stops with you on a variety of top- interconnectedness of what I would call the tigation, you as in-house counsel have a ics. If you understand that perspective of circle of strategy, enterprise risk manage- different role: you have to oversee all the the General Counsel, that really helps in ment, internal control, compliance, internal aspects of the business and understand terms of becoming a trusted advisor. audit, and external assurance. There’s actu- them. Many of them are not legal at all, but ally a structure that is incredibly important may well have legal angles or implications. Also, getting closer to the business is more to companies. It is not really discussed in At the same time, you need to be able to fun. And it may be good for the business of much detail with outside counsel, but from dive deep into the cake whenever needed, your firm. But there’s also a longer-term ratio- the perspective of the General Counsel it is and in whatever jurisdiction you happen to nale, picking up on Hank’s earlier comment of real significance. When it comes to risk, be; and then you must also be able to get on information that is for free. In my view an example of the difference in perspective is back to the top, not get stuck in the details there is a real difference between knowledge how one deals with business risk. I suppose at the bottom of that cake. That, I believe, and wisdom. Law firms traditionally and for most lawyers are risk-adverse; and when you is the quality of a good General Counsel. a large part base themselves, in terms of their look at, for instance, an M&A deal, outside At De Brauw, we call it, in modern lingo, business model, on knowledge. But knowledge counsel’s task often is to assess and mitigate “T-shaped.” It was a new word for me, but has become commoditized and is commod- risks in the transaction. The company’s per- you will understand it — you have to be itizing further. We don’t have a Dr. Watson spective is slightly different: it’s not so much broad and deep at the same time. on our desk as yet but that’s going to change. about avoiding risks, but about the ques- Therefore, as I said before, the classic leverage tion as to where do we want to take a risk, In addition, for a General Counsel, what model of law firms will come under tremen- what is our risk appetite, and how do we is difficult is that legal issues are not always dous pressure; whereas wisdom — which is assess that risk appetite. the preferred topic of Boards and CEOs, the result of, I suppose, long and broad expe- and by the time a legal issue does become rience — comes at a premium. Clients do not For me, one of the big things I have learned important to them, especially if they didn’t always need wisdom. They need your wisdom in business was the concept of enterprise realize it before, it’s not necessarily an envi- perhaps 10, 15 or 25% of your time, but they risk management and the need that it is able place to be in. also need a lot of knowledge. The question an exercise that is done both bottom-up is, “How is the interaction between law firms and top-down. And, actually, you should So, the viewpoints are different. But, as and clients going to develop in that respect involve your Boards in it. I agree with the an outside counsel, in order to be a really over time?” I believe it is a topic that needs comments made that boards should not trusted advisor, you need to have a good serious consideration. get involved in all the details of running understanding of the wider issues the client a company — but they should get involved deals with. Hank also mentioned that. This Let me now make a few observations about in a proper enterprise risk management is all the more important because the role my experiences in-house. First, when I joined assessment. We ran workshops, which were of General Counsel — and I’ve experienced Ahold, I had a number of blind spots. One useful and sometimes revealing. When it

comes to risk assessment, you have to get The last topic I would like to touch on is away from your traditional instincts. Risks litigation and staying close to clients. What develop and change over time and to have I find fascinating to see is that the trusted a good understanding of those issues and a advisor is often a corporate lawyer: someone proper discussion in the Board really helps who deals with M&A, governance, strategy, in making difficult decisions when you go and then when it comes to big litigation, it’s forward. That was one point. handed over to the litigators. I think — and no disrespect to litigators — that it is very The second point is about the multi- important for a good relationship with the jurisdictional aspects of a big company. client that also the corporate partners, the There are several. First of all: culture. Hank client partners, get deeply involved in litiga- has already referred to it so I won’t go into tion. What I saw at Ahold, for instance, in it in detail. I will just say that culture is a a U.S. class action where we were on the big topic that is difficult to grasp. You can receiving end of a big one, is that sometimes state in a Governance Code, as is currently issues become too legalistic. And, within being proposed in the Netherlands, that the a company but also within a law firm, liti- boards need to deal with culture, but the real gation can end up at the wrong level, not question is, “How do you do that?” And so much in terms of quality, but rather in in multinational companies: “How do you terms of strategic and business perspective. deal with ‘culture’ across borders?” I believe When you consider big-ticket litigation from that underestimating the importance of cul- purely a legal perspective, you can actually go same, and I need somebody else.” I thought in the wrong direction. Looking at it from ture — sometimes as basic as understanding that was quite revealing. I would be inter- the financial/‌economic/‌business perspec- what you actually mean when you speak ested in your perspective, Hank. I believe tive is incredibly important, and when you with one another — is one of the biggest that when you look at companies, the good talk about adding value to a client, having mistakes often made in business. ones are diverse in terms of their Boards and a combined team of litigators and corporate their Management Committees or however advisors in big-ticket litigation can really help. The other brief comment I’d make, they’re organized, and their members are pre- multi-jurisdictional, is about enforcement pared to listen to each other. JACK FRIEDMAN: Since you have been and investigations. Again, it has been in private practice as a General Counsel addressed and it is clear that, from a com- Of course, lawyers have to be sensible. If, as and on the Board, do business people who a Board member, you only sit there and say, pany perspective, it can be a challenge to deal are on Boards still think that lawyers just “Oh, I see a problem and I see a risk,” well, I with investigations or enforcement issues in create trouble? many jurisdictions at the same time don’t think that really helps you very much in LODEWIJK HIJMANS VAN DEN going from outside to in-house. It is a transi- What I found that was new when I BERGH: There is an element of that. I tion one has to make; you have to get close to returned from Ahold to De Brauw is that remember when I had just joined Ahold, the business, and you don’t grow your busi- we now have people in the U.S. who deal the then CEO who hired me said, “You ness by just focusing on legal issues. with multi-jurisdictional investigative and know, Lodewijk, you are here to keep us out enforcement issues. What I find interest- of jail,” So, there is that element of it. JACK FRIEDMAN: Let me thank you. I ing and important to clients is that one wanted to have our final panelist, Julian Long, can actually strategize about these issues. At the same time — and that is much more speak next. And, of course, we thank your Obviously, regulators cooperate, as they important — there is the issue of diversity. people for their assistance with this program. should. But companies can also make Diversity is not just about gender or ethnic- choices and there is not necessarily only ity, it is also about matters like background, JULIAN LONG: Thank you, Jack. As the one way, one jurisdiction’s regulator’s way, experience, professional training, and similar last of the speakers, may I add my congratu- to go. So, I suppose, the upshot is that topics. Going back to my first conversation lations to Hank, and also welcome everyone no doubt multi-jurisdictional issues create with the Ahold CEO, I asked, “Why do to Freshfields — my fellow speakers and all challenges, but there can also be benefits in you actually want me on the Board?” And of you in the audience. My next line was to having a well-thought-through strategy as to he said, “Because I want a diverse group of thank our own staff here for all the organi- how to deal with these issues. people on the Board. I think we’re quite the zation and to say that they really make the

ahead of you, there is a very large area — it’s so half of them are allowed to set the legal a restaurant, coffee shop, meeting area; very budget and two-thirds determine how it’s interactive. That was all done in the refur- spent; which made me wonder, who is the bishment of this building ahead of the 2012 other third? [LAUGHTER] Which GCs are Olympics. Clients come in there, into the allowing this to happen? atrium, and admire the nice space. Hank came, actually, relatively soon after it was The survey covered the attitudes of the rest reopened. We sat there, having a cup of cof- of the business — Jack, to your point, which fee and a chat, and Hank was praising our Lodewijk answered well. The surveyed GCs foresight in producing such a fantastic space feel their departments are high-profile, for our clients and for our own people. Then influential, and expected to be proactive in towards the end, he said to me, “What was protecting the organization. And that word, this space originally?” I told him it was a proactive, may not have appeared quite so library. He said, “Oh,” and then you could often in previous surveys. see the look on his face, thinking, “That was the area where all our books that you used The work undertaken by in-house legal to buy from us used to be. So where is the teams is broader in day-to-day legal work, library now?” I didn’t know where the library at 39%; it includes strategy, 25%; and spe- event, but Jack’s done that for me already. I was in this building — because, of course, cialist advice, 22%. When you think about suspect, however, that with that sort of mes- what GCs are responsible for, finding that sage, saying it twice doesn’t do it any harm. nobody was using those hardcopy textbooks and those law reports anymore, so it was a balance between what their in-house teams are supposed to be doing and how that’s For the avoidance of doubt, I’m still waiting very tangible example of how, Hank, your for my embossed letter from my law school, own business has changed. supplemented by outside counsel, is key. and I was in charge of frozen food at my local supermarket at the age of 16 on Saturday The U.K. Law Society issued a report on What do we take from that survey that’s mornings, and I think that’s turned me into Friday about the growing influence of GCs. relevant today? Well, a continued impor- the lawyer I am today, whatever that is. The Law Society is the U.K. professional body tance, and growing importance of the GCs for solicitors. It’s interesting for two principal — something that really started in the U.S., JACK FRIEDMAN: You were overwhelmed reasons, the most important of which is the but now, everybody would agree, is very prev- at the first time you got your paycheck and you report was sponsored by LexisNexis, a key alent throughout Europe. Fundamentally, saw everything that was deducted, all the taxes. division of RELX — which is the reason, I that the building of the right in-house team have to say, I noticed it. Also, it demonstrates is an essential characteristic of the best JULIAN LONG: It was cash, but I didn’t the ever-growing importance of the in-house GCs. Once that team is built, it’s the devel- earn enough to pay tax, just to make that lawyer, and GCs in particular, in today’s legal opment of that team, how you motivate our very clear for the transcript. But more environment. That’s exactly what the Chief team, how you provide them with career importantly I agree with Lodewijk that the Executive of the Law Society acknowledged opportunities and give them the interaction fundamental point behind your comment in doing the survey, which is that the Law with the business, which has inspired many is around diversity. It’s that diversity of Society effectively was set up for lawyers in of them to go in-house. The private practice views; it’s diversity of background; diversity private practice, but a very important part of law firms are, of course, a great source of in its broader sense. If any of us continue it today, are in-house lawyers. well-trained people — as Hank well knows, to fail in that regard, we will not be serv- because he keeps stealing mine! But then ing our clients in the way that we need Maybe some parts of the surveys would not it’s the job of the GC to integrate those to, going forth. So beyond my flippant surprise anyone, but they do provide valida- teams of first-class lawyers in that in-house remark about frozen food, there is a very tion for Jack and the Directors Roundtable’s environment, and that is very much to fundamental point there. honoring of General Counsels such as Hank. Lodewijk’s point.

I was just going to talk relatively briefly about I’m not going to repeat the whole survey Another feature is working out that balance the role of the GC, and I was going to give to you. Just a couple of things that sprung between using the in-house expertise and you a tangible example about how much out, and I think we’ve heard about today the external. A lot of what GCs like Hank things have changed. When you came into — interestingly, 50% of the GCs surveyed are doing is delivering the right judgment. our building this morning, if you looked are responsible for setting legal budgets, Most of the times that we find ourselves

being asked questions by GCs, they’re not that for the next year; and there is no juris- necessarily black and white answers. GCs diction in which whatever rights shareholders can probably work out what the black and have, they’re not flexing them at the moment. white answers are; but the real advice comes Making sure that remuneration is aligned from the judgment calls. with both shareholder interests, and some of the other things we’ve talked about today — to When we are, each member of this panel, have a policy on anti-bribery and corruption; thinking about the way regulators are going to have a policy on data, etc., which then is to respond — whether it’s antitrust regula- not mirrored by the way in which you remu- tors, whether it’s financial services regulators, nerate people, is not a good policy. whether it’s the stock market regulators that we all have to deal with — what GCs are Lastly, we couldn’t finish this, sitting here really seeking is a judgment about what is the in the U.K. today, without saying that for right level of risk and what is the best course. at least U.K. GCs, understanding what the That comes down to how are the GC and EU Referendum might mean for their busi- the external advisor going to help, together, ness is an absolutely prime example of that guide the Board in their decision making. I’m just going to finish with a list of things mix of the understanding of the legal impli- that we see on the agenda for GCs, and cations, the political implications and the That leads to Lodewijk’s point about being maybe this will stimulate some more conversa- commercial implications on their business. the wise advisor. What do we see again and tion. I talked about management of your own again when companies are in crisis? What we in-house legal team, which I think is vital. But in view of time, I’d better stop my list see is the GC assuming a very central role in Creighton and Erik have spoken very well at that stage. the management of that crisis. That’s partly about M&A. This whole concept of “finan- their training and it’s partly the legal exposure, cial fairness,” this idea that corporations have JACK FRIEDMAN: It was a very good of course; but there’s also that ability that GCs a responsibility to be financially fair, particu- list. I wanted to give the audience a chance have to think outside the silos. It is not their larly in the tax world, and the whole EU-ACD to ask a question. Would someone like to — exclusive problem; usually it is not arisen in impetus around base erosion and profit-shift- thank you very much! their part of the business; it is a problem ing, and what is the right tax strategy for you, which needs to be solved for the company as will be increasingly — and is already often [AUDIENCE MEMBER]: Is there a bet- a whole. Either the case or the deal manage- increasingly — on the agenda of GCs. ter way of, or solutions for, having a better ment skills they’ve grown up with make them link between the M&A lawyers or the cor- very well-suited to managing crises. We probably have spoken enough about porate lawyers and the litigators, including dealing with data, but just to endorse the way in which the litigators may be able GCs also have a very good perspective on the point that the whole area of data, the to be closer to the Board? what might be the medium and long-term company’s reputation and the trust your implications of a crisis, as well as just man- customers have in you is absolutely vital in HANK UDOW: Can I come in with an aging the crisis today. all of this. Study after study shows that peo- initial thought? It’s a very interesting ques- ple are more willing to share their data with tion. On a very specific perspective, the first The last part that interests me, is under- people who they think will respect it and thing that jumps to my mind is, because I standing the culture of an organization handle it appropriately. recognize that issue, and I’m trying to think — and Hank mentioned cybersecurity — and of examples, so start with something very the interesting thing for GCs is having that There is also responsible working in a vola- straightforward. One of the things I find insight into the culture, but also a little bit of tile world. What might appear to be distant of incredible value among our employment a lawyer’s detachment from it, and the ability threats, whether migration, whether human lawyers that we have in the business is that to see the way in which the culture influences rights abuses and your supply chain, etc., is they combine exactly what you describe in behavior, influences the assessment of the another thing which is clearly high, and rightly one person almost, because they are litiga- management of risk. That’s a really import- high, on the agenda of General Counsels. tors for the most part, and to the extent that ant thing for the GC to do. They must, to employment issues wind up in the Tribunal Jack’s point, be accepted into the business, And then some topics never seem to go away. or other courts of some kind of jurisdiction, but a little bit of lawyer’s detachment every The vexed topic of Director remuneration; they are absolutely litigating them. But they so often can be very valuable. there is no GC who is not thinking about are there advising from the outset and trying

to position your conduct vis-à-vis an employee It is incredibly important for the legal community to step in and matter from the outset with litigation perspectives in mind. Understanding that, but help steer the course of dialogue about these issues away from certainly working, in the first instance, to put asymmetric, overly-simplistic and facially appealing arguments and yourselves in the best position and potentially primarily avoid any kind of involvement toward a much more thoughtful, often times more uncomfortable into a dispute resolution process. but ultimately more thorough and engaged debate. So I always find, when we have worked on — Henry “Hank” Udow employment matters with the employment lawyers, that is a great model. How would that I value outside counsel answering more advisor, to make sure that the GC has the you translate that model into other aspects? than any other, is what should I do? We range of judgment calls, as we’ve talked Because then it becomes more difficult. always frame questions, “what can we do,” about. So as to the last question, “what can When you’re structuring a business trans- “what’s legal,” “what’s not legal,” “what’s you do legally” and “what should you be action, for instance, how do you integrate a the process.” But at the end of the day, the doing,” this also requires an understanding litigation perspective, as you’re negotiating question for us really, always, comes down of the dynamic in which your client — usu- the commercial terms of a transaction, it to “what should we do.” ally, the in-house legal team — is operating, becomes less obvious; how do you do that? because it’s not just the advice; it’s the way But you do sit back and think to yourself, There are at least two elements to answer- in which that advice is presented. To my “That would be very helpful.” ing that question. One, obviously, is what mind, you don’t surprise your GC client is permissible? But the second one is with advice in front of other people; you CREIGHTON CONDON: The solution much more important, which is the judg- make sure they understand it first; and then that Hank is suggesting is that we fire all mental issue, providing positive solutions you rehearse it — particularly if it’s going to the litigators and make the corporate law- for a business; because at the end of the the Board — you make sure it’s rehearsed; yers both litigators and corporate lawyers! day, the real question is how do we promote it’s rehearsed with the other advisors — if [LAUGHTER] But just to be a little more the business? While we’ll discover at times there are going to be financial advisors serious, in the M&A context, we do that that we can’t promote the business the way aboard, whatever it is, you make sure that all the time. We have litigators on public someone has proposed, almost always one the client, as a whole, is getting a joint up M&A deals, in particular, from day one, can find another way to promote it; it’s just advisory view. That’s really important; we with the clients on calls providing litigation a question of determining what is the real have an important role to play in that. You perspective on issues as we go through it. objective, and so if you can’t go that way, present it in a way which ultimately means Now, that may be partly because in the you can go this way. the Board, if it’s a Board decision, makes an U.S., 98% of U.S. public company deals informed decision. That is our job; our job get litigated? So it’s a little different than I always value the advice that “you can do is to work with Hank and his fellow GCs to just negotiating a commercial arrangement. the following things, but you should not make sure that the people who are discharg- But that is enormously valuable in terms of do them, for the following reasons.” Of ing the duties that Creighton talked about creating the right kind of record and what course, it’s always helpful to add, “In lieu, right at the beginning of this, of doing that you’re going to do on the deal. you should think about these things.” on a properly informed basis.

[AUDIENCE MEMBER]: You can do JACK FRIEDMAN: Erik and Julian, what To me, it’s a little bit more nuanced than “you legal analysis to decide whether something are examples or thoughts you have on the can” or “you can’t” do things; it is under- is legally proper or not, but sometimes, question of how you present to a client some standing the client, the client’s business, why even if it’s legally proper, you have to ask the unfortunate piece of news or legal advice? it wants to do something, in a way which question, “Should I be doing it, or should enables you to hopefully craft solutions, but we be doing it?” JULIAN LONG: There’s quite a lot in at the time when you can no longer craft that that loaded question! No, I can tell there’s solution, you’re very clear about that. HANK UDOW: It’s very interesting you a lot, because Erik’s suggested I went first! ask that question, because, as I thought [LAUGHTER] Most of the topic we’ve JACK FRIEDMAN: There’s a lot more to about today, I thought, “What do you look covered already. Part of it is knowing your getting deals done, as Julian was saying. I for from outside counsel?” As I thought clients, because if your primary client is would guess that’s part of Erik’s job, too, about this I realized one of the questions the GC, then it is your job, as the outside to deal with the personalities of the people.

ERIK BELENKY: Echoing what Julian said, I actually think there are relatively few situations where it’s simply “you can” or “can’t” do something. I mean, when it is that black and white, I think there’s actually, those aren’t difficult conversations, especially when you’re dealing with high-quality GCs like Hank. Ultimately, it does come down to the relationship, and you don’t want to be seen as somebody who is just saying “no,” so you want to, where possible, help craft alternatives. Clients appreciate that, and in fact in the very best of relationships, that’s what they’re paying for. It’s not the case that law firms are distinguishing themselves on the basis of, you know, “We can draft this merger agreement better than so-and-so.” Companies like RELX can hire anybody in the world, and it is a very minimal price of admission that the documents are going to be perfect, that the work’s going to be great. Where firms distinguish themselves is on the JACK FRIEDMAN: I would like to thank issues that Julian, Creighton, and Lodewijk our Guest of Honor for sharing his time and talked about — it’s helping to exercise judg- expertise. I want to thank the Distinguished ment and integrating yourself into the team Panelists. We always thank the audience, so that you can have these types of open and because ultimately, the Roundtable is about candid and productive discussions. the audience. So, thank you.

Lodewijk’s practice focuses on corporate law, Lodewijk has extensive experience across the including governance, advisory, and M&A. field of corporate law. He has also handled a variety of corporate finance matters with a From 2009 to 2015, he was Chief Corporate focus on cross-border equity capital market Governance Counsel and member of the transactions. Clients have included Royal Management Board and the Executive Dutch Shell, Banco Santander, AkzoNobel, Committee of Royal Ahold. At Ahold, his APG, and Corus Group. portfolio of responsibilities included legal, governance, and compliance; M&A; cor- Lodewijk is vice-chairman of the Supervisory porate responsibility, and product integrity. Board of HAL Holding N.V. and a member of He rejoined De Brauw in January 2016. the Supervisory Councils of Netherlands Air Lodewijk Hijmans Traffic Control and the Netherlands Cancer van den Bergh Lodewijk joined De Brauw in 1988, and Institute/Antoni van Leeuwenhoek Hospital. Partner was a partner from 1994 to 2009. He was resident partner at De Brauw London from 1994 to 1998. From 2005, he was a member of De Brauw’s managing committee and headed De Brauw’s Corporate practice until 2009.

De Brauw Blackstone We put business in a legal context, not Facts and figures Westbroek the other way around. So the needs of our • Founded in 1871, largest law firm in the clients come first, legal expertise second. Netherlands That’s why we go out of our way to recruit • Approximately 350 lawyers graduates and hire people with varied interests, experience and nationalities. They take • Trusted adviser to the majority of the AEX the long view, leaving no stone unturned listed companies on their corporate, M&A, along the way. We practice the art and sci- governance, and capital markets matters ence of collaboration — across all disciplines Awards and rankings and national borders — with our own and • Chambers Europe Award for Excellence 2015 We are a law firm with a global reach. We other legal experts, with in-house counsel, have a robust corporate practice, a center of and with other specialists. • Netherlands Law Firm of the Year 2006 excellence in litigation, and an unparalleled — 2016 (Who’s Who Legal) team of regulatory experts. Big matters, big In addition to our headquarters in Amster- • Legal 500 EMEA 2016 ranks De Brauw dam, we have offices in Brussels, Frankfurt, risks, and big arenas require multidisci- in 25 practice areas with tier one rank- London, New York, Shanghai, and Singapore. plinary and multinational teams composed ings for 13 practice areas of strong strategic thinkers willing to dig Our Best Friends — a network of premier deep. We believe it is possible to strike a European law firms — and our informal net- • One of only three Netherlands law firms balance between rigor and pragmatism, work around the world mean we can draw on ranked first tier in M&A by Chambers especially when the stakes are high. the best local expertise when and as required. Global 2016

Julian is a highly rated M&A partner and is Recent Deals/Highlights the London managing partner. • Aon on its redomestication from the U.S. to the UK. Julian has a long-standing excellent reputa- • AstraZeneca on the approaches from Pfizer. tion as a board adviser, reflecting his broad experience across a range of sectors and • British Land on its capital raisings. geographies. He is particularly valued by cli- • BP in relation to the Gulf of Mexico and ents for his relationship skills, evident in his on various M&A transactions. calming influence and reassuring manner. • FEMSA’s sale of its brewing interests and share swap with Heineken. Financial News partner of the year in Julian Long 2015 for AstraZeneca’s response to the • Liberty Global on its Dutch JV with Managing Partner (London) approaches from Pfizer, the Novartis/GSK Vodafone. asset swap, and Rexam’s merger with • Novartis on its portfolio transformation Ball, Julian’s practice focuses on complex, involving multiple transactions with GSK cross-border M&A matters. and Eli Lilly.

He combines his transactional work with • Petrochina on its joint venture with INEOS. strategic advice to boards of publicly traded • RELX on the simplification of its dual companies on capital raising, governance listed structure. and listing regulations and issues in rela- • Rexam PLC on the offer by Ball Corporation. tion to crisis and risk management.

Freshfields Bruckhaus and professional standards in everything we We are one partnership across the world, Deringer LLP do and operate with integrity at all times. We sharing the risk and rewards of our business recognize that the reputation of our firm is and with an overriding duty to bequeath the We want to be the law firm that clients turn vital to our success and we all have a duty to firm in better shape than we inherited it. to for help on the mandates that matter most preserve and grow it for the long term. to them, wherever in the world that may be. We don’t just say we are one firm; we act We are a people business. We see diversity like one firm right across the world. We To succeed, we must be widely recognized as as a strength and value the fresh perspectives, bring together the knowledge, experience standing apart from other firms because our creative ideas and connections that flow and energy of the whole firm to help our people are exceptional and because we are inter- from bringing together people with different clients. We encourage, support, and share national and integrated in the way we work; backgrounds. We want to create a welcom- in the success of all our colleagues. We we add value in everything we do and we are ing, supportive environment in which all work wherever our clients need us. This is uncompromisingly committed to our values. can flourish. No matter how challenging a how we define ourselves, not by reference to matter or heavy our workload, in our daily where we have offices. Cross-border work Set out below is our statement of who we are. interaction we must never lose sight of the isn’t just what we do, it is what we excel at. It embodies our ambition to be exceptional, essential human qualities that we prize. We understand what it really takes to work our culture and our absolute determination across different legal systems and commer- that all of us will work with each other, our We know we deliver best when working as cial environments and to bridge language clients and our other stakeholders, day in a team rather than as individuals operating and cultural gaps. day out, in the way we describe to ensure alone. Being a great colleague and working we achieve our long-term aim. efficiently and effectively with our clients We aim to add value in everything we do. and other stakeholders around the world to We enjoy our work and are determined to do achieve the right outcome is crucial to our We are passionate about helping our clients an outstanding job, whatever our role in the success. We welcome feedback from others achieve their goals, however ambitious and firm. We observe the highest personal, ethical on how we are doing. no matter how many obstacles they face.

Erik Belenky is a partner in Jones Day’s including the sale of Reed Construction Atlanta offi ce. His practice focuses on Data to Warburg Pincus. Other companies M&A, in which he represents public and with which Erik has worked on substantial private companies, private equity fi rms, spe- matters include Koch Industries, Georgia- cial committees, and fi nancial advisors in Pacifi c, and Home Depot. the full range of domestic and cross-border acquisitions, divestitures, joint ventures, and Erik is a frequent speaker at professional corporate restructurings. Erik works with conferences and has written on Delaware clients in a wide variety of industries, includ- law developments and various M&A mat- ing heavy manufacturing, energy and power, ters. He is a member of the board of trustees consumer products, information technology, of The Schenck School (a private school in Erik Belenky and health care. Atlanta for dyslexic students). Partner Some recent representative transactions Education include Newell Rubbermaid’s acquisition of • Duke University (J.D. 1997); Colby Jarden; numerous matters for General Electric College (B.A. 1994); London School of Company, including the sale of its Industrial Economics (Hansard Scholar, 1993) Air & Gas business to Colfax; and multiple transactions for RELX Group (and its Bar Admissions various business units, such as LexisNexis), • Georgia

Jones Day two indications that our focus on serving our important reason for our success in satisfying clients’ needs, and not on the fi nancial metrics client needs, and that success — in satisfying that are so commonly used today to measure client needs — is the entire reason for the law fi rm performance, is recognized by our cli- Firm’s growth over the years. All law fi rms seek to serve clients effec- ents, who reward us with more opportunities tively. Some do it more consistently than to help them meet their interests. Jones Day is organized as a true partner- others. Jones Day ranked highly in the BTI ship, and it operates as such; we are not an Consulting Group’s 2014 “Client Service Client service is the foundation goal of every LLP or LLC or some other quasi-corporate A-Team” ranking, which identifi es the top 30 law fi rm. Over the long term, the quality of entity. We see ourselves as a global legal law fi rms for client service through a national client service offered by a fi rm determines its institution based on a set of principles to survey of corporate counsel. “Blazing the trail growth and success. Jones Day has grown which a large number of men and women for superior client service delivery, Jones Day from a small fi rm in Cleveland to a large can commit — principles that have a social earns Best of the Best status in nine key activ- global institution over more than a century, purpose and permanence, that transcend ities, including Understanding the Client’s while many other fi rms initially better posi- individual interests. While this may well Business and Helping to Advise on Business tioned in many ways have struggled or even be a more sociological description than you Issues — where Jones Day has earned top hon- failed. There must be an explanation for this would see on most law fi rm websites, and ors for an impressive nine consecutive years.” success other than simply the skill of our no doubt is subject to a skeptical reaction Jones Day has also ranked in the Top 10 lawyers, for we clearly do not have a monop- from many when they fi rst read or hear every year since 2000 in the Corporate Board oly on smart lawyers. We believe that the it, we believe it accurately describes one Member/FTI Consulting annual survey of way we have applied our foundation values important aspect of what makes Jones Day the best corporate law fi rms. These are just in Firm management and governance is an the client service organization that it is.

Creighton Condon is the fi rm’s Senior • Synthes in connection with its acquisition Partner. Formerly European Managing by Johnson & Johnson and in its acqui- Partner and co-head of the fi rm’s Global sitions of N Spine and Spine Solutions Mergers & Acquisitions Group, he rep- • Charter International plc in connection resents multinational corporations in with its acquisition by Colfax Corporation acquisitions and sales of public and private companies and in joint ventures and reg- • Cadbury plc in connection with its acqui- ularly provides advice regarding issues of sition by Kraft, its demerger of its beverage corporate governance and control and share- business, in the acquisition of the Adams holder activism. Mr. Condon also represents candy business from Pfi zer Inc., and in the mergers and acquisitions groups of a the sale of Cadbury’s international bever- Creighton Condon number of investment banks. Mr. Condon age business to The Coca-Cola Company Senior Partner joined the fi rm in 1982 and became a partner • Citigroup in connection with various merg- in 1991. He also practiced for several years in ers and acquisitions transactions, including the fi rm’s London and San Francisco offi ces. its sale of EMI Music Publishing to Sony and EMI Recorded Music to Universal Selected Experience Music Corp, its acquisition of Metalmark, • Altice N.V. in its pending acquisition of its acquisition of Old Lane Partners, its sale Cablevision Systems Corporation of Citicorp Electronic Financial Services, • Pall Corporation in its sale to Danaher Inc. to JPMorgan Chase Bank and numer- Corporation ous credit card-related transactions

Shearman & Sterling LLP Repeatedly, clients have told us they choose Integrated approach. When we assemble Shearman & Sterling for the big-fi rm a legal team to address the needs of our resources coupled with the individual client clients worldwide, we work collaboratively, focus and attention we offer. Some of the bringing together collective approaches, most important qualities they value are: ideas, skills, experiences, cultures, and back- For more than 140 years, the world’s leading grounds to support the innovative solutions corporations, fi nancial institutions, emerg- Global perspective. We’re not bound by bor- clients can expect by partnering with us. ing growth companies and government ders. Across the globe, our 850 lawyers have entities have trusted Shearman & Sterling earned a reputation for successfully advising Effective results. Successful outcomes don’t to guide them through make-or-break legal multinational clients on multifaceted issues. result from lucky breaks. They’re tactically matters, including complex transactions and In addition to practicing U.S., English, created and the product of collaboration disputes. At Shearman & Sterling, we put French, German, Italian, Hong Kong, EU, and commitment. Whether locally or glob- our clients fi rst and are uncompromising OHADA, and international law, our lawyers ally, clients value our ability to offer one-stop when it comes to delivering exceptional cli- are fl uent in more than 60 languages and sourcing for a wide spectrum of issues, from ent service. We understand the importance practice in every corner of the world. day-to-day concerns to complex, time-sensitive of building strong partnerships with clients transactions that can affect their businesses and consistently look for innovative ways to Deep experience. Clients count on our long-term. But a one-stop range of services increase the value to clients in everything proven capabilities and strengths to help does not mean a one-size-fi ts-all approach. we do. We offer a number of online ser- them realize their desired results. We’re No two clients are alike and neither are vices to enhance the client experience and known for meeting business challenges our approaches. Each solution is as unique increase client satisfaction, in keeping with head on, marshaling the lawyers and as each of our clients — carefully crafted to our “clients fi rst” mantra. Businesses have resources across practices and geographies position clients for success whenever and choices for addressing their legal challenges. that best align with our clients’ needs. wherever required.