WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

GUEST OF HONOR: Diane de Saint Victor General Counsel, Company Secretary, and member of the Executive Committee, ABB Ltd. WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

THE SPEAKERS

Diane de Saint Victor Neil Whoriskey Robert “Bob” Profusek General Counsel, Company Partner, Cleary Gottlieb Steen & Partner, Jones Day Secretary, and member of the Hamilton LLP Executive Committee, ABB Ltd.

Kathleen Cannon Audrey Harris Christopher Wall Partner, Kelley Drye Partner, Mayer Brown LLP Partner, Pillsbury Winthrop Shaw & Warren LLP Pittman 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 in her career and her leadership in the profession, we are honoring Diane de Saint Victor, General Counsel of ABB Ltd., with the leading global honor for General Counsel. ABB is a global leader in power and automation technologies, based in Zurich, Switzerland. The ABB Group of companies operates in roughly 100 countries and employs about 145,000 people. Her address focuses on key issues facing the General Counsel of an international innovation technology corporation. The panelists’ additional topics include mergers and acquisitions, international trade, FCPA and litigation.

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

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After graduating from the Paris Law School Diane de Saint Victor is a member of the and being admitted to the Paris Bar, Diane American Bar Association (International Asso- de Saint Victor exercised in private practice. ciate), the Association of Corporate Counsel She then turned to the corporate environ- and the International Bar Association. ment and worked in key legal positions at Thales, General Electric, Honeywell Since March 2013, Diane de Saint Victor International, SCA, and the Airbus Group is a non-executive Director of Barclays where she was General Counsel. PLC and Barclays Bank PLC. She serves on the Audit Committee and the Board In January 2007, she joined ABB, a leader in Conduct, Operational & Reputational power and automation technologies, where Risk Committee. she is a Member of the Executive Committee, General Counsel & Company Secretary. She is an Advisory Board Member of the The company operates in around 100 coun- World Economic Forum’s Open Forum Diane de Saint Victor tries and employs about 140,000 people. Davos. General Counsel, Company Having worked in a number of countries Secretary, and member of the in Europe and in the USA, she has wide- Executive Committee, ABB Ltd. spread and global experience in Corporate Governance, Legal & Compliance, Risk Management, M&A, International Policy, and Government Relations.

ABB ABB is a global leader in power and auto- — widely recognized through countless mation technologies. Based in Zurich, awards and scientifi c accolades. Many of Switzerland, the company employs about the technologies we take for granted today, 140,000 people and operates in approxi- from ultra-effi cient high-voltage direct cur- mately 100 countries. The fi rm’s shares are rent power transmission, to a revolutionary traded on the stock exchanges of Zurich, approach to ship propulsion, were devel- Stockholm, and New York. ABB’s business oped or commercialized by ABB. Today is comprised of fi ve divisions that are in ABB is the largest supplier of industrial turn organized in relation to the customers motors and drives, the largest provider of and industries they serve. The group is par- generators to the wind industry and the ticularly proud of its record for innovation largest supplier of power grids in the world.

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JACK FRIEDMAN: Good morning. I’m Jack Friedman, Chairman of the Directors Roundtable. We are a pro bono civic group that has organized 800 events globally over 24 years and at no cost for the audience to attend any event. Our goal is to offer the finest programming for Boards of Directors and their advisors.

The way this series of events honor- ing the General Counsel came about, is that directors have said their companies rarely get recognition for anything good they do. We created this series so executives and General Counsel can have a neutral forum to discuss their companies and the activities of which they are proud. This event will have a transcript which will be made available taught me what I know about the law and Our CEO, Dr. U. Spiesshofer, has come up electronically to about 150,000 leaders on a the legal profession, the individuals more with a very nice way to put it: It’s about run- national and global basis. advanced than me in the profession, and ning the world without consuming the Earth. those who have guided me along the years, In today’s program, we have the privilege of shaping my thinking and my character. I am So, let me share with you one illustration honoring Diane de Saint Victor of ABB, dedicating this morning’s session to these of what the company is doing. I’d like to Ltd. Diane is originally from France, and has people with gratitude. highlight the alliance of ABB with the Solar had positions and responsibilities in many Impulse project. I don’t know whether you countries. She graduated from the Paris Law First of all, I thought I would start with an are aware of this, but as we speak now, there School, and first worked in the law firm sec- introduction of ABB, and then my theme is a plane flying around the world without tor, and then with various tech companies. will essentially be, “What does it take to a drop of fuel. ABB’s contributions to this Since 2007, she is head of Legal & Integrity, practice law internally?” project include embedded engineers and General Counsel, and Company Secretary for ABB Ltd. She is not only active as Board expertise on power output and efficiency. ABB — our mission is power and produc- The plane took off in Abu Dhabi on March Secretary, but she is also a member of the tivity for a better world. The company is a 8th, and this is a 35,000 kilometer journey. Group Executive Committee of ABB in leader in power and automation technol- As we speak, the plane is flying eastward, Switzerland, a Swiss company. ogies. These technologies enable utilities, stopping in various cities in India. Then industry, transport, and infrastructure it will go to China; continuing to Hawaii; I’m going to briefly mention our customers to improve their performance then Phoenix, Arizona. In a few weeks, it Distinguished Panelists, who will each dis- while reducing their energy consumption. cuss a particular topic for today’s program. You can find ABB technologies essentially will arrive at Kennedy Airport, before cross- We have Christopher Wall from Winthrop everywhere; you find our technologies up in ing the Atlantic on its way back to Abu Shaw Pittman; Kathleen Cannon from Kelley the air, crossing the oceans, on the sea bed. Dhabi, where the plane is expected to arrive Drye; Audrey Harris from Mayer Brown; Bob You find ABB technologies in the fields in mid-2015. Profusek from Jones Day; and Neil Whoriskey that grow our crops, packing the food we from Cleary Gottlieb Steen & Hamilton. eat; on the train — if you got on a train this There are many other examples where ABB morning; in the industrial environment; in is contributing as a company towards a bet- Without further ado, our Guest of Honor your homes; and in the office environment. ter world. For example, we are supplying key will make her presentation. equipment for the largest network of electric We are tackling society’s challenges on a path chargers in China. Another one has to do DIANE DE SAINT VICTOR: Thank to a lower carbon emission footprint. In a with ABB drives. The drive is a product you, Jack. Good morning, everyone, and all nutshell, it is doing more, with less energy. which is combined with an electrical motor of you in the audience, as well. I’m grateful Therefore — no surprise — innovation is key — for example, on the elevator that took you to my peers, to my predecessors, those who to the company’s competitive advantage. to this floor. In 2014, the drives installed

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by ABB saved the equivalent of the annual What keeps me awake at night, more than consumption of about 100 million European anything else, are those things of which we are households. This is absolutely enormous. not aware. What are we not seeing yet? And, therefore, we are not addressing it; we’re sit- ABB is headquartered in Switzerland, but ting on it. It’s going to bite us down the road. the company is incredibly global — we oper- ate in more than 100 countries — and the As a legal team, we are adding more value company employs 140,000 people. by looking in the places where precisely nobody is looking. We need people with What does it mean as to practicing law? the intellectual skills to think in that way — We are partnering with law firms around two or three steps ahead. the world, and we have 400 lawyers on the ground in 40 countries or so. Maybe another aspect that is becoming more and more important in today’s world Let me underscore the key asset of the cor- is the ability to compress, to summarize, to poration: its people. Therefore, let me talk express in a very simple way, a huge amount the subsequent over-lawyering arising from about the legal team. That’s what I intend of information that is only partly relevant these pieces of legislation are simply coun- to do this morning. I’ve come to the con- to the resolution of any practical situation. terproductive to the aims of the regulators clusion that a successful in-house counsel is De-complexification has become one of the or legislators. One of the key roles of the someone who has the right mix of intellec- key business requirements. It’s a matter of in-house team, in this context, is to explain tual skills and personal strengths. business performance, value creation — not what is driving the law; what is the objec- only for the corporate world, but also for tive that the law wants to achieve. These Let’s talk about the intellectual skills first. To the society at large. are prerequisites for swift implementation some extent, you might say it’s a given to have and sustainable adoption in the business. education, experience, and training. What The legal team is on the forefront of this bat- Unless you explain the “why,” it becomes makes a legal mind distinct from others? It tle. To that end, one of the main coaching very difficult to prompt for action. has the ability to understand factual circum- advices I always try to give my team is to do stances; to analyze them; to make sense out better lawyering — not over-lawyering. What Now, let me turn to the personal strengths of confusion, bits and pieces; and address does that mean? It means do not over-engi- that are needed while practicing in-house. an overall undefined situation by describing neer as you are practicing law. Yes, indeed, It’s probably what’s most important, even facts and naming them. Once a previously the devil is in the detail, but the ability to though no one told you directly or specifi- undefined situation is given a name, then stay focused on the big picture is one of the cally about it in law school. What are these others in the company will be able to han- requirements of contemporary lawyering. personal skills that I’m talking about? Here dle it on a multifunctional basis. The legal it’s just about inviting you into my office, mind is also anticipating: anticipating how When you think of it, it’s an interesting and sharing with you a few practical exam- the facts will evolve, and drawing the appro- phenomenon, because we work in an envi- ples and situations. priate consequences upstream, ahead of the ronment that continues to get more and curve, as well as seeing how to prevent and/ more regulated, and the laws are more Top of the list is the ability to face reality. or mitigate in the future. and more detailed. Humans are uniquely responsive. They can convince themselves that problems do not Against this background, one of the core In this context, there is an even bigger need exist. We have a duty; we have the abil- missions of the General Counsel is to help for us to think in terms of the big picture. ity to help others in the corporation face the team cope with what I call the “inbox Big picture is really the following: What is reality — even when they don’t want to do tyranny.” Because when you think of it, if the ambition, the objective, of the law or so. When things are not going well, when someone, through email, is asking one of of this particular piece of regulation? The we did not perform up to expectations, the lawyers to do something, it means we objective of legislators and regulators is to the first reaction — sometimes — is denial, know the issue. If we know the issue, we’re protect those who need protection in any finger-pointing, and blame. Our job is to going to find ways to address it and get it human relationship. I’m completely aligned step in and say that this is simply irrele- resolved, because we have the resources — be with this objective. However, we operate vant. The role the legal team is playing is to it internally, or with our external partners — in an environment where sometimes both assemble everyone and help our colleagues to come up with a solution to handle it. the amount of regulation that exists and go straight to the issue at hand.

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Let me repeat, assembling, assembling the You can find ABB technologies essentially everywhere; internal client. All large organizations have their fair share of silo issues. The lawyer’s you find our technologies up in the air, crossing the mission is to break into those internal silos, oceans on the sea bed. You find ABB technologies in because it’s not about this division, this BU [business unit], this function, this country; the fields that grow our crops, packing the food we eat; it’s about the corporation. on the train — if you got on a train this morning; in the The lawyers are acting as internal peace- industrial environment; in your homes; and in the office keepers and help focus on what is at stake externally versus internal differences as they environment. We are tackling society’s challenges on a path may exist from time to time, because a large to a lower carbon emission footprint. corporation is a human entity. — Diane de Saint Victor This has nothing to do with legal theory Transparency Officer. Transparency, of No surprise — one aspect of transparency — or a sophisticated legal analysis. But you’d course, is a mix of defined and undefined I’d like to elaborate briefly on compliance better have it right in order to help move elements. Some of that is regulated — it’s a and integrity. things forward in a constructive way. All matter of law; some of that is not. It is, actu- lawyers have to develop their own recipe; ally, above and beyond the law. It is about Let’s be clear. ABB has had its fair share of what works for one may not work for what is acceptable from a reputation compliance and integrity issues. There have the other guy, or with another colleague. standpoint, and this piece cuts across all been several cartel cases, on the one hand, Psychology is not part of the legal curricu- boundaries within the organization. It is and various improper payment issues leading lum, to my knowledge; it is certainly of daily about pulling together information of a to a fine; a deferred prosecution agreement use, though, in the in-house environment. different nature, combining it, thinking it in 2010; and a self-monitoring regime until through — not only from a legal standpoint, 2013. Now, just recently, we posted on our In a nutshell, it’s about learning by doing, mak- but from a broader branding standpoint; website a press release announcing that for ing mistakes, correcting, and moving forward. from an overall company positioning stand- the third year in a row, ABB made it to the list point. What is the kind of company we of most ethical companies in the world, and Then there is the art of bringing bad news. want to be? we are encouraged by what is essentially ABB We thought this material litigation was well making progress on this journey. [Applause] under control; we thought this transaction The lawyers have a critical role to play, and was going well; guess what? It’s going south. this is definitely something they have to Let me elaborate on the journey itself. We lost the case. Or we’ll have to walk away learn on the job, learning by seeing how it’s Compliance and integrity are not the lawyer’s from this transaction, or the conditions will being handled, with success and failures; business; they are the business of everyone in not be as good as anticipated, and the devi- and, again, learn from that. the corporation. Obviously, it is the lawyer’s ation is material. No question; when it’s not mission to drive and orchestrate preventing, going well, be the first to bring the news. This piece has become increasingly relevant training, controlling, resolving, as need be. Be proactive; do not wait for anyone else to in an overall environment where media and Yes, we all know that it starts at the top. elaborate on it. We must teach our lawyers public opinion will crucify your corporation — Then, as far as the lawyers are concerned, that it is not about trying to justify it, or that should still be deemed innocent, by the it’s a mix of engagement and authority, find- making excuses. It is being truthful about way — but the truth of the matter of it is that ing ways to pull and push at the same time. what happened, taking responsibility imme- it just doesn’t work this way, by any means. The lawyers have to invent what works best diately, and working on the next steps. This in their company environment. This means is a personal skill which is absolutely crucial Again, it’s about personal skills. Under- understanding how we can create a robust — and again, it’s got nothing to do with standing our customers, our suppliers, program through a combination of training, being intellectually sophisticated. the public authorities, our own employees, controls, innovative communication, and the media, public opinion and what their strategic thinking. It takes a lot of personal Then there is a piece that is not in the job expectation is from a transparency stand- strength, obviously, and this is a field where description of legal players; I think it does point. It is also about understanding what the internal fraternity of the legal community not exist on the roster of any company, to the outside world demands from us as a is of great importance to help the corpora- my knowledge. I call it the role of Chief major corporate player. tion move forward.

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This particular field of the law is one of I want to conclude now by saying the fol- the many situations where the legal team lowing: Our jobs are challenging. They are has completely moved away from advising inspiring. Like any position of authority in to actually acting as a full decision-maker. society, lawyering is about serving first. It Helping a younger lawyer understand their doesn’t mean telling the client what he or she duty, supporting them as they are turning may want to hear; it’s about telling the client to action and taking crystal-clear positions what he or she may need to hear. For the in integrity matters, is the number-one future, then, our responsibility is to find the responsibility of the General Counsel, in right people, to nurture them, and prepare my view. Personal authority combined with them for what is a very gratifying mission. professional authority. No compromise on independence. This is absolutely key to Thank you very much. [Applause] in-house practice under the leadership of the most senior lawyers in the corporation. JACK FRIEDMAN: I would like to say that we appreciate you coming here to New Integrity is the bedrock of the company’s York, and I love visiting Zurich. We have a culture, even though a global culture, with mutual admiration for those cities as well can be disappointing, because it turns out the in-house legal and compliance integrity as Paris. they are strong in intellectual abilities, but team demonstrating relentless, persistent, weak in the personal skills. Recruiting is not and innovative skills so as to refresh the I also have some questions to ask. Could a science; it’s an art; and we all can attest to company’s program, keeping it vibrant, and you talk about what it is like being the chief that. As we recruit, we pretty much know staying on our toes relentlessly. legal advisor to the board, and also serving what we are getting on the intellectual side, but actually, we don’t know very much in on the board? This is probably one area of practice where terms of the second piece — that is, the per- more cross-fertilization between law schools, sonality. What makes a successful hire is the DIANE DE SAINT VICTOR: Thank on the one hand, and the corporate world, right mix. you. The directors have little time; they need on the other hand, would probably serve to understand the big picture, as discussed as a reality check. It would probably help Growing in-house legal talent is about before. Tell them in two minutes — bullet the next generation of lawyers be better pre- fostering the relationship between the intel- point type of communication — what they pared for the ups and downs of in-house lectual side and the personal side. Creating need to be aware of. Make sure they’ve got lawyering, because as committed as the conditions where this mix of skills can it, and tell them the truth. Again, it’s not company is to compliance and integrity, flourish and be turned into action is what about pleasing anyone. Be engaged, and there is simply no end to the compliance keeps me busy every day. That takes me to they will be grateful for it. journey. It takes humility, it takes simplicity, one additional point, which I believe is of to admit that I know what I know today; relevance to the external counsels who are JACK FRIEDMAN: In a Swiss company, I don’t know about the next day; and all present in the audience and on the panel: would you have an elaborate committee system? I can say is that we’re going to continue I firmly believe that the right people situ- working on it relentlessly. ated in-house have unbounded potential DIANE DE SAINT VICTOR: Yes! We and value for the company, but the truth have the main Board, and we have three Now, I want to round off what I have just said is that we cannot do the whole work alone. committees. We have the Compensation with regard to the right combination for the The relationship we have with our external Committee; we have the Governance & in-house senior lawyer, by adding the follow- counsels is obviously of utmost importance. Nomination Committee; and we have the ing: I’ve hired or been involved with hiring Finance, Audit & Compliance Committee. quite a few people for various legal positions At some level, then, choosing the firm to On the agenda of the main Board, there internally. What I’ve learned, and sometimes help us out has very little to do with the is a slot for the General Counsel. On the hard way, is that in the combination of particular firm. When we choose external the agenda for the Finance, Audit & the two pieces — the intellectual ability and counsel, we pick the team — the individuals Compliance Committee, there is a slot the personal strength — and this is not neces- at the firm, not just the firm. When we have for the General Counsel, as well; and the sarily a given — sometimes I’m disappointed. to make choices — and it happens essen- same for the Governance & Nomination I have smart people, great education, great tially every day — it is the people in your Committee. Compensation, it depends; legal reasoning; somehow, in practice, they offices that make the difference. there may be topics that are relevant to me

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or not. I attend all these meetings, and colleague, addressing their crowd, locally in addition, there is a slot for Committee on the ground, in their language. The help Briefing on the Board agenda. line is multilingual, around the clock, never stops. Therefore, it’s about being sufficiently JACK FRIEDMAN: You had mentioned flexible to assemble everyone and deploying having 400 lawyers. In practice, how do you a global bedrock of compliance culture — but make sure that the information you need in a way that people can understand, espe- flows up to you within your legal depart- cially from a language standpoint. ment, and also flows up to the C-suite and the directors? Obviously, the ideal is to JACK FRIEDMAN: Given the new media have good upward information, but it’s not and the constant critique on a 24-hour always easy to have it in practice. global basis, how do you monitor what is being said about your company? DIANE DE SAINT VICTOR: Right. First of all, all lawyers on the ground have a direct DIANE DE SAINT VICTOR: The com- reporting line to me as a matter of organiza- pany never stops. It’s absolutely around the tional structure. The main reporting is not a clock with teams, speech, and corporate reporting to the local client, but it’s a func- communication, for all the functions and tional reporting to me. The job description all the businesses. We’re serving custom- of the regional colleagues is very simple: Tell ers around the clock; therefore we are very and foreign investment regulation. During me what you think I should be aware of. engaged from a social media standpoint. these 30-plus years, I’ve seen the company Pick up the phone any time; my cell phone is We were talking earlier this morning about through periods of great growth and peri- on around the clock. If it’s something which transparency. We’re getting lots of ques- ods of difficulty. One theme, at least in my is urgent, jump in and let me know. It is a tions from a transparency standpoint; and, area — which is a subset of a larger area of matter of judgment for the people on the therefore, responding and engaging with all corporate integrity and global compliance ground, and especially the regional counsel, stakeholders is absolutely crucial, from an — is this culture of compliance. There is to identify what needs to be elevated, and overall branding standpoint. history to this culture which goes back to what needs to be elevated now. the founding of the company, which may be JACK FRIEDMAN: One General useful for people to hear. JACK FRIEDMAN: You have 140,000 Counsel made the comment that he had employees in different countries around the his phone on 24 hours a day. One night, he ABB, of course, is the combination of two globe. Can you tell us how you deal with was visiting New York with his family and major global companies in the 1980s — such a large number of operations with accidentally turned off the phone. The next ASEA from Sweden, and Brown, Boveri & unique compliance and regulatory regimes, morning, he had several messages from his Cie from Switzerland. Being caught up in and employee rights in each country? It CEO who had called all through the night. the geopolitical context then, as the company must be a challenge. No matter how diligent you are, something is today in a different context: ASEA was can always come up and you just do the targeted by the U.S. government for export DIANE DE SAINT VICTOR: You’re best you can. control violations, selling very simple com- absolutely right. A global company is, indeed, puter equipment to Czechoslovakia during a challenge. It is multilingual. For most peo- Let’s hear from our panelists. Our first one the Cold War. We worked through those ple, English is not their mother tongue; will be Chris Wall of Pillsbury Winthrop issues; the case was settled. But the CEO at therefore, it’s international English. As you Shaw Pittman. Thank you. the time, Percy Barnevik, basically took the walk into the copy room or the kitchen, or line, “This will never happen again.” As a the employees’ corner on the ground floor CHRISTOPHER WALL: Thank you, consequence, the company, from a very early in the factory, you’re going to find cartoons Jack. And thank you, Diane, for those really point, developed a compliance system in this talking about “health and safety” and “integ- insightful remarks. They were very, very area, dealing with export controls and sanc- rity” as the two pillars of the company’s helpful for all of us. tions, which was truly market-leading, ahead culture. Forget about the lawyer speech or of the curve. They put this into place far in the slide show; you’ve got to relate to peo- It’s been my privilege to represent and advance of many major U.S. companies, and ple in a way they can understand. Then, advise ABB for over 30 years in my area, uniquely did so in a context that was truly you also engage, face-to-face, with a Chinese which deals with export controls, sanctions, global. This is before U.S. companies had

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become as global as they are today. ASEA and Brown, Boveri & Cie, when they com- bined into ABB, became a global company with operations all around the world. ABB adopted English as its single company lan- guage, rather than German or Swedish, and it instituted at the time — which is still largely in place today in concept — a matrix management system which has overlapping geographic product/functional specialties with functional headquarters in different parts of the world, product headquarters in different parts of the world, and executives across the world. ABB had to deal with cross-border transfers of technology, global sanctions and so forth in a very, very complex environment. ABB put into place a system which relied on much of the input that I provided many years ago, which has now been thoroughly internalized so that it runs Today, how does it play out? What are the that prohibit companies from doing business on its own, with its own staff, and reports issues? They are many and varied. We all with Iran, in some cases down to the micro indirectly through the lawyers and into the see, for example, the evolving scope of the level of individual municipalities. It is a very General Counsel’s office. Ukraine sanctions on Russia. Supplies of complex and challenging environment. compressors and pumps for the Russian oil But the essence of the program is one which and gas industry to named parties on the M&A due diligence presents another speaks to the company’s recent recognition Specially Designated Nationals List; how important set of issues. ABB is a company as one of the most ethical companies in the does one deal with that? There may be a that’s historically grown through acquisi- world today by Ethisphere Magazine. This legal requirement in one country that you tions: Combustion Engineering, Cincinnati requires that the company must comply with must supply this equipment, but the laws Milicron, Vetco Gray, Lummus Global, and all of the laws of the countries in which of the United States say that you cannot many others. Some of these transactions it does business. That’s the basic element. supply this equipment. These are complex resulted in the acquisition of problems and Beyond that, there is also the requirement issues that have to be resolved within this I’m sure we’ll be discussing later how one to do business within the spirit of those culture of compliance. deals with those situations. The point here laws; to do business in a way that devel- is only that the U.S. national security impli- ops credibility with the authorities in the Iran is another example. It is an enormously cations have to be addressed at the outset various countries; while recognizing that in attractive market. At one point, ABB his- and due diligence must include an examina- some cases, these laws will conflict. U.S. torically had business in Iran, which was tion of the target company’s export control requirements, for example, on doing busi- completely legal within the context of the and sanctions policies and practices, in ness with Cuba, are different from those in sanctions in force at the time but with addition to FCPA and other traditional due Europe or Canada or elsewhere. The partic- the imposition of ever stronger sanctions diligence areas. ular requirements for dealing with Russia since the 1990s, Iran has been off-limits. or Iran are different. All of these have to be Now, however, the situation is evolving fur- Yet another set of issues arises when indi- taken into account, and not just in terms of ther, as the P5+1 countries negotiate the viduals who are U.S. citizens hold senior the compliance aspects, but also in terms terms of a nuclear deal that may result in executive positions abroad, or individuals of reputational risk — what will be seen as lifting at least some sanctions. who are citizens of other countries manage the right way for the company to be doing companies in the United States. They are business. These are very sensitive issues, Navigating these issues is not just a matter subject to sanctions laws and regulations as obviously, that can have major political ram- of knowing what is legal and what is not individuals, and the requirements applica- ifications for the company, but these are all as the sanctions change. There are collateral ble to them as individuals may conflict with elements of the compliance program that issues as well, such as SEC reporting, and the requirements that apply to the company. has been in place for these many years. state government procurement requirements ABB has had to navigate those issues as well.

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The point of all this, though, is to say that If you’re a company and you’re wondering ABB is a company that has always been whether the trade remedy laws might be ahead of the curve in the area of export con- something you should look into, here are trols and sanctions compliance and, it’s fair some factors to consider. If you are a U.S. to say, compliance generally. Its matrix sys- manufacturer and you are seeing imports tem, and its compliance culture, have been increase in volume, imports selling at adopted by other major multinationals in low prices, there are lost sales to imports, the United States, such as General Electric, employee layoffs that result, facilities are IBM, the major petrochemical and oil com- being idled, capacity is unutilized, there has panies and so forth — all of these companies been a financial hit — those are the kinds now have systems that are similarly based of things that should trigger alarm bells. on the system that ABB developed back Those types of events mean the trade laws in the 1980s. are something that you should look at.

It’s ahead of the curve; it’s become a model We gathered the data to determine whether for the rest of the world in the area of compli- the large power transformer industry, as a ance; and it’s been my privilege to advise the whole, was injured. This is not a compa- company for these many years. Thank you. ny-specific exercise; it’s an industry exercise. We brought the case on behalf of a coali- JACK FRIEDMAN: Thank you. I would tion of producers. like to move ahead to Kathleen Cannon of Kelley Drye & Warren. The other component to pursuing a trade commercially for ABB. The wisdom of action is to examine whether an unfair Diane in supporting Dave and that effort KATHLEEN CANNON: Thank you, trade practice is occurring. The case that we allowed my firm and our team to move Jack. My area of expertise, and where I brought for ABB against large power trans- forward with the case on behalf of a coali- intersected with Diane’s company, was in formers from Korea was a dumping case tion of U.S. companies, to address unfairly the area of trade remedy laws — anti-dump- — that’s international price discrimination. traded imports of large power transformers ing and countervailing duty laws. Don’t There are international agreements address- from Korea. We found that the Korean gasp and worry that I’m going to give you ing this behavior, so it’s not simply a U.S. producers were openly advertising that they a dissertation on the technicalities of how law. The U.S. law codified an international dumping calculations are done, or else were selling products in the United States agreement that recognizes this type of prac- you’d all have to run for much more cof- at very low prices. U.S. utility companies tice. As I said — without going into all the fee. Instead, what I want to describe this were boasting that they were buying these details — an analysis of dumping basically morning is the importance of these laws as imports at extremely low prices. The conse- asks whether a U.S. price is lower than the a business tool for a company, and how — quence was that U.S. producers were having price of the product in the home market whether you’re a General Counsel, a director to close down facilities and lay off workers. — here, Korea — or is below the cost of pro- of a company, or an outside counsel work- They couldn’t compete because the playing duction of the product. ing with a company — being familiar with field wasn’t levelled. That’s what the unfair the power of these laws is very important. trade laws are designed to address. These A lot of people ask, “How can that be? The laws can be used offensively to address laws make sure that when injurious dump- Why would somebody be selling a product unfair imports. Defensively, if you end up ing or subsidies occur, remedial duties are at a price below their cost? How could they the target of a case, it’s very important to imposed so that U.S. companies can com- even do that commercially? That doesn’t have a basic knowledge of these laws. pete on a level playing field. make any sense.” In the large power trans- former case against Korea, we found that We began to work with ABB about five We worked with ABB and other U.S. pro- Korea was pretty much a protected home years ago. Dave Onuscheck, who is the ducers of transformers, as a team effort, market. It didn’t allow imports of any type U.S.-based General Counsel of ABB, came and a number of colleagues on that team of large power transformers into Korea. As to us because he recognized that there was are here today. They were part of that suc- a result, they were able to sell their products a problem with unfairly traded imports. cessful effort for ABB. We first gathered in Korea at high prices, and use the prof- Fortunately, Dave was aware of the trade economic data on the companies, to deter- its they were making in Korea to leverage remedy laws as a tool that could be used mine whether they were injured. sales into the United States at low prices.

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That’s what we were able to demonstrate What makes a legal mind distinct from others? It has the in our trade case. We proved dumping at a level of 15 to 30 percent. Remedial duties ability to understand factual circumstances; to analyze were imposed. I emphasize that these are them; to make sense out of confusion, bits and pieces; and remedial cases; they are not punitive. The basic purpose of the law is simply to say, address an overall undefined situation by describing facts “We want a level playing field.” ABB and the other U.S. transformer producers said, and naming them. — Diane de Saint Victor “We’re not asking for favors; we’re not ask- both countries than had ABB not examined tips in Mr. Luberda’s paper. It is important ing for benefits; we just want to offset the this situation on a global basis, and instead to be aware of steps that need to be taken unfairness.” That’s what the outcome of simply isolated the U.S. product. to protect your company from potential duty the case was designed to do. liability. Even if you are a purchaser of the The other thing I wanted to mention briefly product, anti-dumping duties may affect you Commercially, there were some sensitivities. is the importance of being prepared to downstream in higher prices. Companies were concerned, “What will defend these actions as well. If you are an our customers think? Are our customers importer, then you need to be very aware of In sum, whether you would like to use these going to be upset about this?” You have to the ramifications of the trade laws when a types of laws offensively or need to use them look at that issue, of course, because you case is filed against a product you import. defensively, they have powerful commercial have to consider how a customer will react. My partner, Alan Luberda, wrote a paper effects. Use of these laws can help level the What we find is that often customers are giving tips for importers on defending trade playing field for U.S. manufacturers; but not that adverse to these actions in the end. cases. Often, importers think, “I can figure their use can also cause importers to be Initially, they want to know, “What does out what the duties are, and I know that I’m subject to significant duty liability if you are this mean for me?” They often don’t want not selling the product at a low price, so I’m not careful. to see the distortions in the market. In fact, fine.” But be very careful there, because your in some cases, we’ve had customers come to instincts as to whether a product is dumped I will stop there and, again, I compliment support us in bringing a case and provide from a commercial vantage are often not true Diane and her team at ABB for their wis- testimony on behalf of their U.S. suppliers, from a technical level. We will have compa- dom in taking advantage of these trade laws because they recognize the need to have a nies come to us and say, “I’d like to bring in successful cases. I would also like to say fair playing field. a dumping case, but the Chinese product how very much we enjoyed working with isn’t being dumped.” Their analysis is that you all on this case! The other thing that was a bit unique about because Chinese labor costs are so low, they the large power transformer case that we are not selling below their cost of produc- JACK FRIEDMAN: Thank you. Chris worked on with ABB was that ABB has tion.” In fact, the Commerce Department, and Kathleen, can you give some examples manufacturing facilities to produce trans- which implements these laws, doesn’t look of the type of agencies or courts that make formers not only in the United States — ABB at costs of production in China. Commerce the decisions in these situations, whether it manufactures transformers in St. Louis, uses surrogate countries because China is is national, regional, global, UN-related, etc.? Missouri — but also in Varennes, Canada. viewed as a non-market economy. It’s very ABB was wise enough to recognize that if important that anti-dumping experts assess KATHLEEN CANNON: For the inter- you take action just in the United States and dumping, especially where China is involved, national trade laws that I was describing, you don’t look at Canada, there could be to examine those factors. the Commerce Department is the agency a spillover effect in the other market. ABB that looks at whether there is dumping or had counsel in Canada that we worked with Similarly, if you’re an importer, you can’t subsidies. The U.S. International Trade right from the start, to assess how a U.S. assume you’re okay because you believe the Commission, an independent government trade action on transformers would affect product is fairly priced, or because a foreign agency, is the entity that looks at whether Canadian operations. Often imports will producer assures you that it’s okay. If you injury is being caused by imports. We have shift more heavily to Canada after a U.S. are the importer, you are the company on to go before both agencies and you must case is filed. What happened in the trans- the hook for paying the duties. You have to win at both agencies, proving both dump- former case was we filed a case here, and be extremely cautious, do your homework, ing and injury, to be able to get the order very shortly thereafter, a case was filed in and make sure that you’re working closely in place. Once the order is in place, then Canada, both of which were successful. As with the foreign producer. If the imported U.S. Customs & Border Protection enforces a result, there was a much broader relief in product is subject to duties, consider the the order. There can be challenges globally,

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before the World Trade Organization’s Department also — another agency within for example, regulates imports of encryption Dispute Settlement Body as well. Those Commerce, the Bureau of Industry Security, technology, as does Russia. Singapore regu- cases would be handled by the U.S. Trade where I was the Assistant Secretary for a lates exports of encryption technology. For Representative’s office. In ABB’s case, we period of time. There can also be coopera- a global company like ABB with operations were fortunate — there was not a global chal- tion with the State Department, and with the everywhere, all of these rules come into play. lenge. Finally, there can be court appeals, Defense Department, the Defense Technology It’s a very, very complex environment. and those would be before the U.S. Court Security Administration, and in some cases, of International Trade. That court is a spe- the Department of Energy, as well. JACK FRIEDMAN: Thank you. I want to cialized Article III federal court based here ask Diane a quick question. What is your in New York. Those are the basic players These matters are very rarely brought strategy for litigation, regulatory, or multi- that are involved in our world. before the courts. Whenever there’s an national transactions so that your outside enforcement matter, they are, in almost all counsel can assist? JACK FRIEDMAN: The appeal from the cases, settled. But theoretically, they can be federal court is to what body? appealed to the D.C. Circuit. DIANE DE SAINT VICTOR: It very much depends. We closed a transaction KATHLEEN CANNON: That appeal In addition, what is very complicated about right before Christmas in 30 countries. You is to the U.S. Court of Appeals for the this area is that these rules are, for the most cannot find a law firm with the resources in Federal Circuit in Washington, D.C. That’s part — at least in the case of Iran, as the pri- all these places, or at least it didn’t feel like our appellate court. The next appeal would mary example — all covered by United Nations we’d have the quality we wanted to have in be to the U.S. Supreme Court. Those are Security Council resolutions. U.N. policy the 30 countries at stake. Assembling the the tiers of the trade court system. and resolutions, of course, play a major role. list of firms and asking the firms to work The European Commission and the member together, which they do, is the name of the JACK FRIEDMAN: Chris? states of the European Union all adminis- game. It’s not difficult to have firms work trate these sanctions. For example, the Russia together in a very professional way; I don’t CHRISTOPHER WALL: In the world of sanctions, the Ukraine sanctions that are find that as a barrier, actually. export controls and sanctions, there are a lot currently evolving are being implemented of different players. The sanctions are largely in tandem — the U.S. sanctions were being Now, there are situations where it’s easier — administered by the Treasury Department’s implemented in tandem with the EU, and say, a transaction in a few major countries Office of Foreign Assets Control, with input the European Commission regulations and — and law firms with the right resources in from the State Department. The export con- the enforcement bodies within each mem- the three or four capital cities. Then it’s fine; trol area is administered by the Commerce ber state, and all across the world. China, it goes to one law firm. If it doesn’t go well,

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first of all, we’re going to talk to our part- President’s security plan that was published ners and ask them to change as appropriate; last month. When you ask the SEC FCPA or we’re going to make changes ourselves, Unit Chief, “Is this year going to be just as because in the context of a global transac- big as last?” she’ll say it’s going to be big- tion, we just cannot be in trouble because ger. As a matter of fact, the cases brought one or the other jurisdiction will be behind this fiscal year alone total the entire amount and not up to the quality level we need. brought last year.

JACK FRIEDMAN: At one of our pro- The other message that they are continuing grams, a partner of one of the law firms to send is that they are pursuing individu- said about the real world, “You can have als. It’s a trend that will continue. peripheral countries who have a rule that requires you to file a document, even Why does this keep so many General though there is no activity in that coun- Counsels up at night? It spans across indus- try, and they charge a fee for the filing to tries. It’s not industry-specific. Anybody approve it. Sometimes there comes a point with government touch points outside the where you have to discuss with the client United States has an FCPA risk, period. whether to take your chances and forget about it, because all they’re trying to do is has to say. What are the messages that The Deputy Chief of the DOJ Fraud get some extra revenue.” they’re sending, and how can we decode Section, who has exclusive jurisdiction for them, along with the resolutions that are DOJ over prosecutions of the FCPA, says CHRISTOPHER WALL: I would agree. the basis for essentially how the FCPA is that their cases have shown that it’s not For example, when a little Pacific island like prosecuted and enforced. We just don’t industry-focused; it’s country-focused; it’s Vanuatu enacts a regulation that requires have the case law and the settled history; risk-focused. This is another message that you to do something, that’s probably not it’s all done in negotiated resolutions. Every we’re hearing loud and clear. going to be a major risk to your business. time the DOJ and the SEC talk, we think, In an area such as export controls and “What are they saying, and how does it International enforcement and inter­ sanctions, which often are subject to huge apply to our clients, and what can General national cooperation are on the rise. What regulatory interpretation and discretion on Counsels get out of it,” as far as what they does that mean? That means cases like the part of the authorities, one has to make need to do to prepare themselves for any- Petrobras. That means Canadians are now judgments about how strictly — or how thing that may come up in the FCPA realm. coming to the table. The U.S. is still the big broadly — one should read the regulations gorilla in the room. They are the enforce- and apply them in a particular situation. Today, we are benefitted that the DOJ and ment authorities, the players at the table. the SEC enforcement has come out over the But more countries, are pulling up a chair. Obviously, you have to get the basics right last two months with a number of different in every country where it’s important. It is statements, and we’re going to try to decode They’re seeing more and more instances of a matter of risk assessment and judgment. them and tell you what the messages are, parallel investigations and multiple resolu- and what we think they mean. The bottom tions against a company being brought by JACK FRIEDMAN: Thank you. I’d like to line is that credibility is king. It’s some- different countries. This is straight out of introduce Audrey Harris of Mayer Brown. thing that ABB already knows about in Deputy Chief Stokes’ mouth. [Reference to the FCPA realm. quote on the PPT slide] [The following comments were accompa- nied by a PowerPoint Presentation (PPT) Let’s start off with what the messages are; What does “international cooperation” including slides of topic headings and what has the DOJ and the SEC been mean? It means a new paradigm for com- recent quotes of DOJ and SEC officials. talking about regarding FCPA lately? panies in access to information that was The comments often make reference to and once only available through company coop- discuss the materials on the slides.] The basic entry point is that FCPA is still eration. They’re setting up task forces; they an enforcement priority. We like to say that have dedicated FBI agents to FCPA only. AUDREY HARRIS: In the FCPA realm, it is “second only to terrorism.” Is that They are getting better and greater access to probably more than in any other area, we’re still true today? We think so. Combatting overseas information that once they could always looking for what U.S. enforcement global corruption even made it into the only get if a company cooperated.

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The SEC showcased this issue by just We have a duty; we have the ability to help others in the listing the countries — and some here are cities — [referring to PPT slide] the corporation face reality — even when they don’t want to do countries that they thanked in their press so. … No question; when it’s not going well, be the first to releases on FCPA cases over the last year. It’s getting broader and broader, and rarely bring the news. Be proactive; do not wait for anyone else is there a new resolution or press release by DOJ and the SEC that does not thank to elaborate on it. — Diane de Saint Victor a foreign jurisdiction for their help in the prosecution or investigation. The SEC echoed this by saying, “Most do about it? How do you know this isn’t of the time, we say, ‘Go out and do what going to happen again? And how do you The next message: The whistleblower — is you’re going to do, and come back and know it’s not happening elsewhere?” These changing the detection calculation. Both periodically report to us.’” That’s the usual answers have to be credible. They have to the DOJ and the SEC are coming out resolution. But they also note you need be based on criteria that the enforcement and saying, “Listen: two-thirds of our cases remediation. I love this line: “We often see authorities understand. What’s the process? that are before us right now were not vol- instances where companies have self-dis- You have to be able to demonstrate it. untarily disclosed by the company. We’re closed and cooperated, and it takes them not depending on you currently; we’re get- far too long to have remediated. This is an How do you create credibility in these situ- ting the information from other sources.” important part of demonstrating to the gov- ations? You align compliance with enforce- The head of SEC enforcement generally ernment that you are taking it seriously.” ment criteria. What are we hearing? What warned, earlier this month, that they have are the DOJ and the SEC saying when a very strong whistleblower program. It’s What do these messages actually mean? we’re sitting across from them with our cli- something that every company and every What are the enforcement authorities really ents? They’re talking about things that are General Counsel has to factor in when trying to determine? What ABB knows, risk-based. Are your priorities and your com- they’re talking about FCPA compliance and and what companies that are smart in the pliance plan and internal audit plan based detection. As Deputy Chief Stokes says, it’s compliance and integrity area know, is that on risks and evaluated every year? Are your a calculated risk. they’re trying to determine what kind of resources towards where your areas of high- company this is. Does this company get it? est touch points with government officials What are the DOJ and the SEC trying to do Essentially, is the company credible? From are, in highest risk countries? Do you have with this message? They’re trying to tip that compliance and investigation to remedia- protocols and data analytics that show you calculus in the favor of voluntary disclosure tion, are they credible on every level? where those risks are, and factor them in on and cooperation by saying that voluntary a real-time basis into your program? disclosure and cooperation count, and try- In front of the DOJ and the SEC, credibil- ing to show it. ity is currency. As we all know, perfection The other term we’re hearing a lot is “back- is not the standard, nor can we ever achieve stops.” “You need backstops.” “What are Recently, Deputy Chief Stokes came out it in a compliance program. That’s straight the backstops in your system?” We’ve gone and said that Alstom could have saved $565 out of the DOJ and the SEC guidance on beyond the age of paper programs and pol- million if they had voluntarily disclosed and FCPA. Voluntary disclosure is still volun- icies and procedures that people can read cooperated. They even pointed to Avon and tary. It is a customized analysis that you on a flat piece of paper. It needs to be auto- said, “Even if you don’t voluntarily disclose, have to go through with your client on the mated; it needs to be processes that can cooperation saved Avon an additional 20%, facts, and it is a calculated risk assessment. document every step of the way. and voluntary disclosure could have saved it even more.” But at whatever point a company is sitting It also needs to be demonstrated that you’ve across from the DOJ and the SEC — implemented it. It’s great to have the paper, What do you buy with voluntary disclosure? whether or not it’s because they voluntarily as they say, but without implementation, You buy an ability to affect the scope and disclosed; they received a knock on the without these systems, you’re nowhere, in potentially the scale of the investigation. As door; or they received a subpoena — they front of the DOJ and the SEC today. DOJ said, “We’ll give the company room have to answer the following questions: to perform its own investigation, and we’ll “How did this happen? Where did you They’re talking about testing and audit. provide guidance, if you come in the door look? How did you investigate? What did They want to know that you not only have with a credible plan.” you do about it? And what are you going to the systems, but you’ve tested them, and

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it, it’s a difficult process. From the very top From that standpoint, there is enormous of an FCPA risk matrix to the very bottom pressure from the younger generation, and of training and testing — not only the con- it’s good, because they’re driving the cor- cept — do they understand what to obtain or porate world towards what’s right from the retain businesses means, rather than testing society’s standpoint. That is, a more ethical just to that concept, or are you testing to the and more transparent environment. Integ- systems and training to the systems, as well? rity is not just a matter of law enforcement; it is, which kind of company do you want to ABB has found a way to be at the top of create? It’s a combination of forces; it is the the FCPA compliance and integrity game, customers, the suppliers, the shareholders. and is setting the bar for the rest of the We had people who left our stock at some companies. They already know what we talk point and then return to our stock, and that about — that credibility is king, and ABB is “market pressure,” if you will, and that, has shown that they have the credibility as well, is good, because it’s driving in the before any enforcement authority, United right direction. States or otherwise. you’ve tested them on a periodic basis based JACK FRIEDMAN: If investors have the on risk. They want to know that you have JACK FRIEDMAN: There are many con- idea that there’s a culture of corruption, follow-up protocols for investigation. When stituencies of a global company: employees, fraud, or unethical behavior in a company, you have audit hits, what do you do with suppliers, customers, government, media, they are possibly being treated in an unethi- them — do they just sit there on a piece of investors, politicians, etc. What difference does cal manner and are afraid of being cheated. paper or only follow up with the financial it mean to a company and to those different guys? Or is this something that’s integrated groups to be known as an ethical company? DIANE DE SAINT VICTOR: Right. into your FCPA compliance program? They Actually, it even goes beyond that. When we want metrics. You’re going to sit down, DIANE DE SAINT VICTOR: First of all, mess it up from an integrity standpoint, it’s and they’re going to ask you, “How many and very simply, all the stakeholders you’ve a quality issue. It means we’ve been sloppy, full-time employees do you have working mentioned are part of these overall com- and we underperformed. It does not speak on FCPA compliance? How many FCPA- pliance and integrity exercises. Customers well about us as an organization from an related or corruption or GAAP-related calls don’t want to be in business with a com- overall quality standpoint. What we are see- have you had to your ethics hotline?” You pany falling behind from any of these things. ing — and we see that all the time — when need to know that information and be able Your‌ employees want to feel proud of the we’re having integrity issues, we are very to work it into your compliance plan in company they are associated with. often seeing some other issues — poor lead- order to be credible. ership; manufacturing issues. It’s an overall JACK FRIEDMAN: Also, I imagine, if requirement from a quality standpoint that I think it sums up pretty nicely when somebody eventually leaves the company, goes above and beyond what is required by Deputy Chief Stokes says, “If you look at they’d like to have on their résumé, “I’ve the law enforcement authorities. our largest resolutions, I think one very worked for honorable companies in the past.” clear pattern that can be drawn from them JACK FRIEDMAN: Thank you. We’re is the big resolutions very closely correlate DIANE DE SAINT VICTOR: Abso- going to get back to compliance a little bit with very poor internal controls and weak lutely. One of the driving forces, actually, is later, but I’d like to turn to our next speaker, compliance.” That is what they’re looking that employees know they will have to leave who is Bob Profusek of Jones Day. at. The SEC echoes. “Another thing we if they breach the integrity requirements ask companies — how are you testing? Do that are rolled out internally. They know, BOB PROFUSEK: Good morning. It’s you have internal audit integrated? Are you as well, that in today’s world, they will prob- an honor to be here. I’m Bob Profusek, the doing specific FCPA audits?” ably have a hard time finding employment head of M&A at Jones Day. I have had with another tier one company, because the privilege to work with ABB on many These are questions that ABB asked long the world has changed to the point that occasions in that setting. ago and has already mastered. But they’re we’re not the only company driving the questions where they’re leading the way in integrity exercise; most large corporations This is a little bit off-topic because we’re compliance and integrity, thanks to Diane are aligned. Therefore, in today’s world, a focusing on legal matters, but I’m going to and her in-house team. When you look at breach of integrity is, indeed, a career killer. start with an accounting due diligence issue.

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There was an interesting settlement this companies to get the deal done — not liter- week of the HP v. Autonomy litigation. It was ally at all costs and in ignorance of all risks the third time that the shareholder litigation — but this legal stuff is not so important; we had been brought to a court for settlement. can deal with it later. In the two prior occasions, the judge had said, “Not good enough.” The settlement Certainly, ABB doesn’t operate this way, involved the establishment of a risk com- and most big companies don’t either. But mittee at HP, and essentially the assignment plenty of companies do operate that way. of HP’s claims against Autonomy, because, It’s surprising how often the directors will while I don’t know if you may vaguely have the presentation as to the financial remember, but it was only a couple of years aspects of the transaction and the syner- ago that HP announced a $9 billion write- gies and the timetable and the strategy, but off of a roughly $11 billion acquisition it the due diligence is not in the boardroom. had completed 10 months earlier, and dis- That’s a big mistake today. covered that there were, according to HP, rampant issues with the financial statements We’ve just talked about these issues. I can’t of the target company. That, of course, gave remember a deal recently that didn’t involve rise to the typical blizzard of litigation, but an OFAC [Office of Foreign Assets Control] this particular path of litigation was deriva- issue, sanctions issue, or at least the need to tive against the directors. look at something and try to figure it out, or a corruption or competition law issue. You it feels like everybody is on the same page Now, what does that have to do with any mentioned about closing over these minor — they’re all wearing suits (unless they’re things? We had a deal recently where we dis- of this stuff? Unless you’re a bank and you in Northern California); they all look the need to do it because of the Dodd-Frank same; we generally speak English; the doc- covered that a subsidiary that was four levels laws, you don’t necessarily have to have a uments look the same — it feels like there’s down from the target company happened to risk committee as a corporate governance this global way that we do deals. Of course, be incorporated in New Zealand; they had a matter for your board of directors. There’s the way people do business globally is very foreign investment law there which, believe no one-size-fits-all formula in any part of different, and the standards of what is it or not, applied. Even though we weren’t corporate‌ governance. It does mean, in the corrupt are very different around different acquiring the New Zealand company; it was M&A environment — especially when it is parts of the world. four layers down. These are the kinds of in the way it is conducted today — that risk issues that really need to be thought about. assessment of the type that ABB has inter- This is all against a backdrop in which the I’m not necessarily saying that your direc- nalized must be second nature — it’s just like deal business is designed to take advantage tors need to have a whole presentation of when Scottie Pippen and Michael Jordan of big data, so that you don’t get any real the due diligence. In fact, you want to be played, they didn’t think about which guy information about the company that you’re in a position — which I believe ABB and was cutting to the basket — it just happens. buying. You put so much data in a virtual many other very large companies are gen- That’s the way it happens at ABB — in my data room that it’s difficult if not practically erally — where there’s a presumption that experience, anyway. That risk assessment impossible to divine anything about it. The if there’s an issue, it will be brought to the process has to be internalized as part of the bankers structured a multi-tiered process floor of the boardroom, but the board won’t process, and communicated in an appropri- that’s designed always to be a little bit in be buried in trivia. ate fashion to the board of directors. front of you, and to keep you a little bit away from the actual target company and On the other hand, the HP experience One of the reasons that anti-corruption its management, and your ability to talk to proves that there can be many dangers to has been so prominent in this conversa- its people who may know things the deal directors. Now, none of the directors in tion is that there’s no question the U.S. is process people don’t want you to know. the HP case is personally financially liable. the world’s policeman on anti-corruption. Especially in an environment like we’re in But all of them were damaged to some There’s also no question that the world is today, where M&A, for many companies, degree. Of course they were damaged; just globalized. At the same time, there’s equally is almost needed because of the deleveraging being named in a suit of that nature is a no question that the standards for what’s of their balance sheet and the slowness of problem. In today’s world, when we’ve corrupt or not are very different, despite the growth generally in their particular indus- got all these other things that are resulting fact that when you sit down to do a deal, tries; there is a desire at far too many from globalization and the connectivity of

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the world, the risk associated with M&A Due diligence needs to grow up, from my gets increased particularly because the point of view, in the M&A context. It isn’t process is designed to make you feel like something that should be done just to say, you’re getting due diligence, but not really “We did it and I can prove that because I actionable due diligence. have this memo that we looked at all these papers.” It needs to be focused, and it needs I’ll conclude with one thing: We have to be done by the best, most experienced been giving this a lot of thought, and we professionals, whether they’re forensic recognize that due diligence is, in most accountants or senior litigators who assess significant projects, divided up between var- litigation or environmental issues, and ious specialists. The accountants do their not be relegated to something that is done quality of earnings analysis, the business so that a box can be checked. Again, HP people do what they do, then the lawyers do wasn’t a legal problem, but there are plenty what they do, and we divide it up inside our of situations like it. firms — so-called “outside counsel.” Ittends to be ritualistic — again, not for big compa- JACK FRIEDMAN: Thank you. The next nies, but for most companies — it tends to time I do a $50 billion deal, I’ll be very be superficial, because the bankers want it careful with my due diligence! Obviously, to be that way. They don’t really want you to the bigger you are, the more there is at find anything out. They want you to get into stake, and the more money you have to do NEIL WHORISKEY: Thanks, Jack. Just that virtual data room, write meaningless due diligence. to follow up on Bob’s worries about dili- summaries of normal commercial contracts gence not being properly done, I’m going that aren’t read by anybody and don’t mean BOB PROFUSEK: Yes, but it’s almost an to follow up with some of my worries about anything in the first place. inverse relationship on diligence, because contracts not being properly done. In par- the smaller companies have some strategic ticular, when you buy a public company in At least in our firm, we stepped back and technology and usually don’t have the sys- the United States, you have no recourse said, “Look, we’ve got to restructure — we’ve tems. That’s the issue. The GEs and the after you sign that agreement, other than got to take a new look at this.” Due dili- ABBs and the IBMs and all the rest of if there’s a material adverse effect on the gence should not be done by second-year them, they have the systems — sometimes business. Unless something goes horribly, associates who really don’t know what because they’ve been through it, and have horribly wrong, you’re buying that business. they’re doing. We really need to get indus- had to have them — but the smaller ones You don’t have indemnities after you close; try experts who know something about this don’t, and those present the real issues, you have covenants there, and sure you can particular industry, to think about what the because a $50 million acquisition can give breach them, but the covenants mainly say, problems are, identify them, and figure out rise to a $100 million problem. “Please operate in the ordinary course of an actionable due diligence program — with business,” which generally isn’t that hard to the client — this is always with the client. I DIANE DE SAINT VICTOR: If I may, do. Your reps are brought down to a mate- don’t mean to imply that we do this ourselves closing a transaction with a large entity on rial adverse effect standard. Again, you’re — we do it with our clients like ABB, all the other side of the table takes work, but really stuck unless you have a material designed to ferret out whether or not there’s it can be done. With a small transaction, adverse effect on the business. a problem that needs to be accounted for the target has no experience about the deal in pricing or deal terms. Then, a person in process; it means that you have to do it all What is a material adverse effect? Well, Diane’s position can actually report to the from your end, and help them navigate the nobody really knows, because the Delaware board about what the issues are, because entire process. A small transaction may be courts have never seen one. [Laughter] when there are issues — and, again, at HP, a big headache, it takes a lot of time, money they were accounting-based, allegedly — they and effort. So that you have to ask yourself, They do exist, and people have conversa- are not only career killers for the business is it worth it? tions about them all the time. What the development people who brought the deal contracts say are that a Material Adverse to the board, but they can really be huge JACK FRIEDMAN: Thank you. I’d like Effect is a material adverse effect on the issues generally, such as hundred million to have Neil Whoriskey of Cleary Gottlieb business or financial condition or assets dollar fines for FCPA violations. Steen & Hamilton speak now. or liabilities and sometimes even prospects

Spring 2015 17 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

decline was part of a cyclical problem in the quickly. A lot of very smart people lost business, so the buyer should have known. money on that. In 2004, the average lawyer “You should have known this could happen; would have had a 25% chance of saying, it did happen; don’t tell me you’re surprised “There has been a MAC. In the six months now.” In all of these fact-based cases, there’s it took to clear the deal, it’s clear that the a lot of atmosphere, and the atmospherics business is really just going south; nobody’s were definitely not in Tyson’s favor. It did buying pagers anymore.” You had some not make me pull out my hair and think, shot at making that argument. In 2010, in “A MAC will never occur,” because I think only 2% of the cases did people have that, it can. We’ve seen it plenty of times, where were people able to live without that general you have your deal renegotiated on the basis industry carve-out. of something very bad happening between signing and closing. When you’re a deal lawyer, it makes it tough to sit and think about how it’s going to play In any case, this is something that M&A out. Importantly from a business organiza- lawyers fight about all the time. I’m sure tional standpoint — and I think Diane is Bob’s done it thousands of times. I’ve done absolutely great at this — you actually have it thousands of times. You used to be able to think through the risks of these things, to have something of a conversation about before you buy this company. If you haven’t some of these exceptions. About a year ago, thought about industry risk, you should, I got tired of people throwing in my face because if you don’t, if you take that carve- of the company — which is all fine though that in 99% of the deals, we always get this. out, you’re buying the company even if nobody knows what that means. That defi- They pull out these ABA studies that say things go south. nition is followed by a litany of things that 95% of the time you get this, 95% of the are not MACs [material adverse changes], time you get that. It’s true — and you look Change in law is another one that’s really and these are the carve-outs which include at the latest studies and you can see these risen dramatically. In 2004, about 43% of things like anything that happens to the charts here — it’s all in the 90s, all of these the time that change of law carve out was in industry generally is not a MAC; anything things. This is striking because if you go your documents, so the buyer would have that happens to the economy generally is not back about eight years, you see the numbers a 57% chance of being able to walk away a MAC; any change in law is not a MAC. are much, much lower in a lot of these cat- from a deal if there was a change in law The list goes on and on and has been get- egories. People tend to think the market’s that adversely affected the deal. In 2012, ting longer, in my experience. People have doing this so it is okay, but you’ve got to they had a 7% chance of walking away. not been very thoughtful about how those think through some of these things. This is another one where people say, “We carve-outs have been growing. know what the legislative process is; we You can take one example — the general know what’s coming down the pike.” Tell The touchstone case for a MAC is the industry carve-out. This is the one that says, that to the people who were trying to do Tyson, IBP Foods v. Tyson case, decided by “If it’s happening to the whole industry, inversions. Things happen quickly, even in then-Vice Chancellor Strine in Delaware in it’s not a material adverse effect.” Let’s say Washington sometimes. More likely, when 2001. Vice Chancellor Strine said, “Yes, in 2001, ABB decided to buy a pager fac- you’re doing a cross-border deal, things can there’s a 40% drop in revenues, in projected tory. In 2002, that pager factory is out of happen quickly. You might not be as expe- revenues, but that’s not a MAC.” Everybody business, but in 2001, somebody thought rienced in that country, or know as much said, “My God, there will never be a MAC. it was a good idea. Or they decided to buy about the legislative process in that country, No one will ever call a MAC, because that’s Blockbuster Videos or Borders Bookstores. as your seller does. Again, you have to ask huge. How can you have that terrible a These are things that go to Diane’s humil- yourself, why is the buyer almost universally change between signing and closing?” ity point — you don’t know what’s going to taking this risk now? happen next, but sometimes things do hap- In the first place, I think people overstated pen, and they happen much more quickly It goes back to what Bob was saying about Tyson a little bit, because in fact, Chancellor than you could possibly imagine. In my the auction process as having been so Strine said, “You could say 40% if it had mind, books are the least vulnerable to tech- tightly run now. There, you really get beat been sustained and unforeseeable, that nological change. But that was an industry up. But that’s, again, why you have to have a would have been a MAC.” He thought this that really took a huge hit, and very, very team that has the ability to say, “In thinking

Spring 2015 18 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

through this issue I can tell you, board, this DIANE DE SAINT VICTOR: Right. In a is not an issue or this is an issue, and I’ve nutshell, it is a mix of processes and people, thought about it.” Not, “It’s what the mar- as usual. Processes are absolutely required. Be ket does, so I said okay.” That’s not going it the hotline, the training, the audit, or the to be good enough in some transactions. investigation. But they are only as good as the people who are running them. Also the culture Another one is change that happens as a that has been created and that is being created result of the announcement of the deal. is an ongoing process within the company. What people mainly think about it is, okay; something bad is going to happen because Processes are not enough to help the when Ogre Company decides to buy its company move forward. Processes are competitor, Happy Valley, they’re going the prerequisite, but they will only lead to to fire half the people there; they have a “tick the box,” which is short of delivering completely different supply chain, so all the on the expectation of the law enforcement suppliers are going to go away. You have to authorities and also the other stakeholders know what Ogre Company should expect, that we discussed before. and take the risk that those changes will occur on the announcement of the deal. JACK FRIEDMAN: If you have processes in place that collect a huge amount of data, These are just some of the examples of That’s okay; maybe that happened 69% of how do you evaluate that data? how this can play out. I do find it astound- the time in 2004. But now, only 6% of the ing, when you look at the numbers, how time‌ does that not happen. The idea that in DIANE DE SAINT VICTOR: Exactly much the market has accepted these trends. 94% of the cases, the buyer is going to know They tend to build on themselves so that right. Again, it’s a mix of automated better than the seller what is happening to the next time, it’s going to be harder to resources, such as a huge amount of emails the seller’s customers, the seller’s employees, tell somebody that if 90% did it last year, that are being produced as part of a search. the seller’s supply chain, as a result of the 95% are going to do it this year, and then You start working with keywords, and it buyer coming in. It defies logic; this is not 100% are going to do it the next year. helps you cut into this and concentrate on really something that you would anticipate if the key items. It’s a mix of automation and you just thought about it independently and The takeaways here are (1) that it’s really then someone using their brains, looking didn’t look at all these market statistics. tough to fight the market, and (2) that you’re into the whole thing and pulling it together not going to be able to fight the market in a meaningful way. More anecdotally, there’s also a bunch of unless you have a team that’s willing to think these new carve-outs that are coming in, about, and understand, each one of these JACK FRIEDMAN: Any other comments? some of which I find hilarious. There’s one risks and how it applies to the deal, and then — I’m sure you’ve seen it, Bob — it drives be able to explain it to the board of directors BOB PROFUSEK: The United States me crazy. They say, “Anything that results or to their GC when their GC says, “What government recognizes that even the best of from the consummation of the deal can’t do you mean, we can’t get out of this deal? systems can be subverted. Now, it doesn’t be considered a MAC.” If all of your IP This is crazy. This is a risk we should have seem to give you as much information when licenses go away because they have a change thought about.” And maybe it is. it’s your problem. You don’t seem to get of control clause in them, and that’s not that answer, but it comes back to culture. a MAC, and you’re closing without the IP Thank you. You have to have processes, mechanisms, licenses, you’re in trouble. and certifications. But fundamentally, it’s JACK FRIEDMAN: Thank you very culture that makes the difference, and that’s There’s another one that says, “Anything much. I’d like to invite the whole panel to one of the problems in the M&A context. that results from the performance of the discuss a topic with Diane, and have her It’s very hard to get a handle on the cul- merger agreement will not be a MAC.” If take the lead on it. ABB is noted for having ture because that’s the way the typical deal you’re signing an agreement, and you can’t very well-developed, intelligently planned, process is conducted. Very few companies tell me when you’re signing the agreement cutting edge compliance systems in place. are sold anymore without an auction pro- that performing the agreement will not have I think you have had something to do with cess. As I said, in terms of information, it a MAC on your business, there’s something it! What I’d like to do is examine the system is done on big databases, and really hard to more I need to know before I sign it off. you use, and some of its achievements. figure out what it means. The management

Spring 2015 19 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

presentations are done in rooms like this, know, if they’ve done business with people help the people execute the controls. You in the M&A context, it is very hard to get on the other side. They know a lot about can’t lose sight of the fact that compliance the pulse of the culture, but fundamentally, these businesses they’re buying before they has to be substance rather than check-the- it comes down to culture. buy them. If they don’t know them directly, box mentality. Any time that a process has they know them indirectly, because they have become a check-the-box rather than helping JACK FRIEDMAN: Do you interview mutual suppliers. You can’t go around and to facilitate substance, then there is a prob- specific people? ask everybody everything all the time. But a lem, and we have to continuously, as Diane lot of times, that information is there within mentioned, regenerate and continuously try BOB PROFUSEK: It depends. There is the organization, and you can dig it out. to address compliance from different ways. due diligence, but again, the bankers have It’s training, and then it’s systems. You as their job, to get the deal done and get DIANE DE SAINT VICTOR: Absolutely. have to keep that fresh, and you have to the most money. They try to keep the pro- You’re going to want to know. You’re going keep that new, in order for it not to become cess moving along so you can’t ever be quite to want our HR person to talk to someone form over substance. caught up to that. Rarely do you ever get to sit on the HR side at the target; you’re going to down with anybody beneath the top people. want to have the environmental expert not JACK FRIEDMAN: Chris, did you have only visit some of the sites — not necessarily a comment? JACK FRIEDMAN: It would be helpful if all of them, but at least the most important you could walk in and talk to somebody who sites — and then have a conversation with CHRISTOPHER WALL: I have a small has been there 20 years and get the truth. the head of Health & Safety at the target. add-on just to supplement the process and You’re going to do the same with pension, BOB PROFUSEK: Some companies do with insurance, with quality, and with man- people aspect of it, and also to supplement talk to other people, the larger companies ufacturing. You want get a sense of who what Audrey was just commenting on, and particularly. The quality of earnings is a big these people are; will they fit well in our that is the emphasis on training. One of the issue in terms of understanding the financial organization? Then, somehow, we sit down ways a culture is exemplified is the ability to side of the target. They buyer may hire private and talk, and come up with our own assess- get the information down to the people who investigators; they talk to former employees. ment of who they are beyond the report that are actually applying that information. That They try to go around the investment bank has been prepared by the deal team. central element of a compliance program, mechanism to get to that information. of course, is to have teams of people who AUDREY HARRIS: Both Bob and Diane go around and make sure that the people NEIL WHORISKEY: One of the best have been talking about compliance in that who need it have the necessary informa- sources of information, too, is that people it has to be substance over form. What tion, which is something that ABB is doing at the business — particularly ABB — will the process is and what the systems do are very, very well.

Spring 2015 20 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

Another aspect — and it goes to the culture Now, just recently, we posted on our website a press release point of going beyond the strict require- ments of the law, but also the reputational announcing that for the third year in a row, ABB made it and other risks involved — and that’s, in to the list of most ethical companies in the world, and we the particular area where I’m involved — the notion of a sensitive country. That’s not just are encouraged by what is essentially ABB making progress a country where the law says you cannot sell a product or you can’t do business with on this journey. — Diane de Saint Victor a person from that country; it’s a country programs in the communities where we live. JACK FRIEDMAN: In the five minutes where it’s legal and permissible, but it could We are bringing electricity to rural places in a month that you have free what do you involve some reputational risk or some other India. It means that the shops will be open personally enjoy doing? compliance risk. That has to get reported late at night instead of having to close as the up the line, depending on the size of the sun goes down. If they keep the shop open DIANE DE SAINT VICTOR: Learning, transaction; in some cases, all the way up to longer, they’re going to make more money, learning, learning, and capturing what’s very senior levels at the group headquarters. because they’re going to have more custom- out there that I’m not seeing yet. That is The analysis is more than just the strict com- ers. It means they’re going to be able to feed a missed opportunity in terms of personal pliance; it’s the sensitivity and the broader and professional growth. the kids, and hopefully pay for clean water in reputational and other factors that have to go the house so that the kids will not get sick. into these considerations. JACK FRIEDMAN: One of your colleagues from Zurich, when asked this question said, It is part of the corporate agenda, and it’s JACK FRIEDMAN: We can conclude the “We like to take vacations in the small towns not just to look nice or a marketing piece; program with a few short questions for Diane. near the coast in northern Italy. The problem absolutely not. It’s part of the culture; it’s is, Zurich is not that big a city and therefore, First of all, what are the philanthropies or part of who do we want to be as a corpo- you see the same people on vacation as you public causes that ABB has adopted? rate; and, therefore, we’re not necessarily do in business.” [Laughter] making a big fuss out of it, but I can cer- DIANE DE SAINT VICTOR: Absolutely, tainly confirm that the company is engaged I would like to thank the audience for there are two aspects to that. First of all, lots in all types of different programs: homes coming, because the Roundtable is for the of ABBers are engaged in a number of activ- for the needy, electricity for all, and health audience. I want to thank the Distinguished ities close to them in their communities, programs in places where it’s not easily Panelists, and particularly our Guest of and the company is supporting these efforts, available. This topic is discussed in the Honor for sharing their wisdom and mak- giving time, and resources as well. Then, boardroom at least twice a year. Again, we ing themselves available for this program. the company is engaged in a broad range of commit money, time and resources. Thank you very much.

Spring 2015 21 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

Neil Whoriskey is a partner at Cleary • Evraz Group S.A. in its $4 billion acqui- Gottlieb Steen & Hamilton LLP, currently sition of IPSCO, Inc. and simultaneous based in the New York offi ce. His practice divestiture of certain of the purchased assets; focuses primarily on mergers and acquisi- • Citibank N.A. in its $1.4 billion acqui- tions. He is the Co-Chair of the Corporate sition of The Bisys Group Inc., an Governance group. NYSE-listed provider of back offi ce solutions, and simultaneous sale to J.C. Mr. Whoriskey’s matters include represen- Flowers & Co. of the insurance and tation of: retirement business of Bisys; • OpenText Corporation in its pending • Evraz Group S.A. in its successful $2.3 Neil Whoriskey acquisition of Actuate, Inc., a NASDAQ- billion public tender offer for Oregon Partner, Cleary Gottlieb Steen & listed company; Steel, Inc. and its successful public ten- der offer for Claymont Steel; Hamilton LLP • Embratel, Embrapar, and Net Serviços de Comunicação in connection with a • McDonald’s Corporation in the disposi- “going-private” cash tender offer to acquire tion of its Latin American assets; Net Serviços, a NASDAQ-listed company; • Electronic Arts in its investment in Neowiz, • Scientifi c Games Corporation in its $1.5 a Korean games publisher and distributor. billion acquisition of WMS Industries, Inc., a NYSE-listed company; In Hong Kong, Mr. Whoriskey represented, among others, Daewoo Motors in its sale to • The Raine Group in its investment in General Motors; The Carlyle Group and Important Media, LLC, a joint venture with JPMorgan Corsair in the sale of Koram Trey Parker and Matt Stone, the creators of Bank to Citibank; and AIG related funds the “South Park” television series and “The and Newbridge Asia in their purchase of Book of Mormon” musical production; a controlling stake of Hanaro Telecom, a • Western Digital Corporation in its dis- NASDAQ listed broadband company. Mr. position of certain assets to Toshiba Whoriskey also represented Newbridge Corporation; Asia in its acquisition of a controlling stake • Goldman Sachs in its sale of Litton in Shenzhen Development Bank, the fi rst- Loan Servicing; ever sale of control of a Chinese bank to foreign investors.

Cleary Gottlieb Steen & countries in which it operates, and its suc- States and many of whom have worked as cess in multiple jurisdictions, Cleary Gottlieb trainees in one of the fi rm’s U.S. offi ces. Hamilton LLP received Chambers & Partners’ inaugural The fi rm was among the fi rst international International Law Firm of the Year award. law fi rms to hire and promote non-U.S. lawyers as equal partners around the world. A leading international law fi rm with 16 Organized and operated as a single, inte- offi ces located in major fi nancial centers grated global partnership (rather than Our clients include multinational corpora- around the world, Cleary Gottlieb Steen a U.S. fi rm with a network of overseas tions, international fi nancial institutions, & Hamilton LLP has helped shape the glo- offi ces), Cleary Gottlieb employs approx- sovereign governments and their agencies, as balization of the legal profession for more imately 1,200 lawyers from more than 50 well as domestic corporations and fi nancial than 65 years. Our worldwide practice has a countries and diverse backgrounds who are institutions in the countries where our offi ces proven track record for innovation and pro- admitted to practice in numerous jurisdic- are located. Although each of our 16 offi ces viding work of the highest quality to meet tions around the world. Since the opening has its own practice, our “one fi rm” approach the needs of our domestic and international of our fi rst European offi ce in 1949, our to the practice of law offers clients in any offi ce clients. In recognition of the fi rm’s strong legal staff has included European lawyers, the ability to access the full resources of all global practice, its effectiveness in dealing most of whom have received a portion of of our offi ces and lawyers worldwide to the with the different business cultures of the their academic legal training in the United extent their matters so require.

Spring 2015 22 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

Bob Profusek is an advisor to substantial merger with Cap Gemini ($11.7 billion); businesses, focusing on M&A, including and numerous transactions for WL Ross takeovers and buyouts; restructurings; and & Co., including the acquisition, IPO, corporate governance matters, including and sale of International Coal Group ($3.4 executive compensation. He chairs the billion); the merger of International Steel Firm’s global M&A Practice. Group and Mittal Steel ($4.1 billion); and its build-ups in automotive components, Recent representative M&A transactions textiles, mortgage servicing, and shipping. include Potash’s successful defense against BHP’s unsolicited tender offer ($43.1 bil- Other companies with which Bob has lion), the Continental-United Airlines worked on substantial matters include Robert “Bob” Profusek merger of equals ($8.5 billion), Total’s Abbott, Disney, Macy’s, and Wasserstein Partner, Jones Day tender offer for SunPower ($1.4 billion), & Co. Cliffs National Resources’ acquisition of Thompson Mining ($4.9 billion), and Bob is a member of the boards of direc- Procter & Gamble’s sales of its pet foods tors of two NYSE-listed companies. He also ($2.9 billion) and Pringles snacks ($2.7 bil- is a frequent speaker regarding corporate lion) businesses and joint venture with Teva takeovers and corporate governance, has Pharmaceuticals for its global OTC medi- authored numerous articles, has testifi ed cine business. Prior transactions include before Congress and the SEC about take- Nextel’s merger of equals with Sprint over and compensation-related matters, and ($46.5 billion); Ernst & Young’s dives- is a regular guest commentator on CNBC, titure of its consulting business through CNN, Fox, and Bloomberg TV.

Jones Day the seamless transfer of resources across above personal interest. There are also no multiple jurisdictions and borders. separate profi t centers by offi ce, other geo- graphic lines, or practice area. Jones Day is a global law fi rm with 41 offi ces Our internal organization and related in major centers of business and fi nance culture, designed to maximize client service, Our highest priority is to deliver the best throughout the world. Its unique governance and our unmatched breadth and depth of of the Firm to every client engagement. system fosters an unparalleled level of integra- experience in diverse areas of law distinguish Our commitment to client service has tion and contributes to its perennial ranking Jones Day from other successful law fi rms. repeatedly earned the Firm the “Number as among the best in the world in client One for Client Service” ranking awarded service. Jones Day provides signifi cant legal We Are One Firm Worldwide. by the BTI Consulting Group, an organi- representation for almost half of the Fortune This unique approach allows us to respond zation that monitors client satisfaction for 500, Fortune Global 500 and FT Global 500. to clients’ needs with the most effective team, legal services. The annual ranking is based strategy, and experience. Coordination by on independent, individual interviews with We offer a full suite of integrated legal ser- team leaders assures overall project integ- more than 300 Fortune 1000 corporate vices throughout our offi ces in the United rity and facilitates both client inquiries and counsel. Jones Day’s consistent high ratings States, Mexico, Latin America, Europe, the reporting. In addition, unlike partners at have earned us a place among the elite few Middle East and Asia. other law fi rms, our partners are compen- fi rms elected to the BTI Client Service Hall sated strictly on the basis of merit and their of Fame. The Firm was also listed among Our long-standing client base — which commitment to excellent client service, and the “Best of the Best” for Keeping Clients includes leading companies engaged in not on numerical criteria (such as billings Informed, Understanding the Client’s virtually every industry — benefi ts from the or originations). As a result, our partners Business, and Helps Advise on Business strength of our interdisciplinary teams and are incentivized to put the client’s interests Issues, among other categories.

Spring 2015 23 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

Kathy Cannon is managing partner of the Ms. Cannon regularly appears before fi rm’s Washington, D.C. offi ce and for- multiple U.S. trade agencies, including mer chair of the International Trade and the Department of Commerce, the U.S. Customs practice group. With more than International Trade Commission, and the 30 years of experience in international U.S. Trade Representative. She has partici- trade law, Ms. Cannon focuses her practice pated in numerous oral arguments before the on assisting domestic industries that are U.S. Court of International Trade and the experiencing injury due to unfairly traded U.S. Court of Appeals for the Federal Circuit. imports, primarily through the use of anti- dumping and countervailing duty laws. Education University of North Carolina School of Law Kathleen Cannon Ms. Cannon has been involved in a wide J.D., 1981 Partner, Kelley Drye range of trade matters, including World & Warren LLP Trade Organization (WTO) international North Carolina Journal of International Law disputes and negotiations, and she has par- and Commercial Regulation, Editor-in-Chief ticipated in implementing trade legislation and regulation. She has been involved in University of Maryland B.S., magna cum rules and dispute settlement issues in the laude, 1977 ongoing Doha Round of trade negotiations, and previously was involved in the Uruguay Round of trade negotiations, and the North American Free Trade Agreement (NAFTA). She has also represented U.S. exporters charged with dumping by third countries.

Kelley Drye & Warren LLP Premier Service Since 1836 effi ciency, lean staffi ng, excellence in advo- Kelley Drye & Warren LLP is an interna- cacy, early resolution of litigation and use of tional law fi rm founded in 1836 with more state-of-the-art technology. than 300 lawyers and other professionals practicing in New York, NY; Washington, For more than 170 years, Kelley Drye has DC; Los Angeles, CA; Chicago, IL; provided legal counsel carefully connected Stamford, CT; Parsippany, NJ; and Brussels, to our client’s strategies and has mea- Belgium, additionally offering a full scope sured success by the real value we create. of legal service through our affi liate relation- Although the practice of law has evolved ship with the Mumbai-based independent with time, the value of outstanding client law fi rm, Fortitude Law Associates. service — and Kelley Drye’s commitment to providing it — have remained unchanged. Kelley Drye helps clients reach their busi- ness goals by providing legal advice in more than 30 practice areas, delivered with

Spring 2015 24 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

Audrey Harris is a partner in Washington, and the SEC. This was one of the first cases D.C. and a member of Mayer Brown’s White to result in a self-monitoring provision, Collar Defense & Compliance practice. avoiding an expensive external monitor. She is a veteran Foreign Corrupt Practices • Working with multinational clients to Act (FCPA) attorney with over a decade of create and execute FCPA compliance experience running multi-year, multinational programs, policies and procedures, compli- investigations, with a comprehensive investi- ance gap reviews, testing/controls analysis, gations, counseling and defense capability. internal audit and investigation capabilities Audrey regularly appears before enforcement and proactive anti-bribery reviews. authorities and has extensive experience in designing, executing and presenting internal • Conducted internal investigation and Audrey Harris investigations before multinational corpora- advised large defense contractor with regard Partner, Mayer Brown LLP tions, the U.S. Department of Justice (DOJ), to civil and criminal enforcement liability Securities & Exchange Commission (SEC), arising from billing and payment practices. Department of Treasury Office of Foreign • Representing the CFO of a major U.S. Assets Control (OFAC), Department of corporation in an SEC investigation and Defense, and Multilateral Development enforcement action, and bringing the Banks (MBDs). Her experience runs the matter to successful resolution. gamut of white collar representations including false claims act, healthcare fraud, Audrey is admitted to practice in: management of earnings, money laundering defense, and even anti-terrorism matters. • District of Columbia (2003) Prior to joining Mayer Brown, Audrey was a • Virginia (2002) Partner at Kirkland & Ellis LLP. • U.S. Court of Appeals for the Fourth Her experience includes: Circuit (2002) • Representing one of the largest engineering • U.S. District Court for the Eastern companies in the world, with an annual District of Virginia (2003) revenue of more than $27 billion and operations in more than 100 countries, • U.S. District Court for the District of in connection with an investigation and Columbia (2003) deferred prosecution agreement with DOJ

Mayer Brown LLP and securities; litigation and dispute resolu- and because it makes sound business sense. tion; antitrust and competition; U.S. Supreme Diversity and inclusion broadens our knowl- Mayer Brown is a global legal services pro- Court and appellate matters; employment and edge and skills, heightens our awareness of and vider advising clients across the Americas, benefits; environmental; financial services reg- sensitivity to cultural issues and empowers us to Asia and Europe. Our geographic strength ulatory and enforcement; government and respond to the challenges of serving a clientele means we can offer local market knowledge global trade; intellectual property; real estate; that spans the globe. Diversity and inclusion combined with global reach. tax; restructuring, bankruptcy and insolvency; are hallmarks of Mayer Brown heritage and and wealth management. will be key drivers of our future success. We are noted for our commitment to client service and our ability to assist clients with We have a significant presence in the Mayer Brown handles many of the most their most complex and demanding legal Americas, Asia, and Europe with more than important cases and transactions for the largest and business challenges worldwide. We serve 250 Chambers-ranked lawyers worldwide. We companies in the world, and we consider our many of the world’s largest companies, includ- are regularly ranked among the leading law diversity efforts critical to the level of service we ing a significant proportion of the Fortune firms in the Americas, Asia, and Europe by provide to our clients. Clients recognize diver- 100, FTSE 100, DAX and Hang Seng Index all of the main reviewing bodies. sity and inclusion as indispensable drivers of companies and more than half of the world’s success in our multicultural world. To remain a largest banks. We provide legal services in Mayer Brown is committed to diversity and world-class law practice, we must continue our areas such as banking and finance; corporate inclusion because it is the right thing to do push forward in these vital areas.

Spring 2015 25 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

Christopher Wall is the senior international Mr. Wall served as Assistant Secretary of trade partner at Pillsbury Winthrop Shaw Commerce for Export Administration during Pittman LLP, where his practice focuses on 2008–2009. He works with the Departments technology transfer regulation, foreign invest- of Commerce, State, Defense, Treasury and ment, international trade, and compliance. Homeland Security, the Committee on Foreign Investment in the U.S., the U.S. Mr. Wall advises and represents clients International Trade Commission, and the on export controls (commercial and Offi ce of the U.S. Trade Representative. defense); economic sanctions and embar- goes; national security reviews; anti-boycott Mr. Wall received undergraduate degrees issues; the Foreign Corrupt Practices Act from Yale University and Oxford University Christopher Wall (counseling and investigations); import and his J.D. from the University of Virginia Partner, Pillsbury Winthrop relief proceedings; Court of International Law School. He is a member of the bars Shaw Pittman LLP Trade appeals; complex Customs matters; of the District of Columbia and New York, bilateral investment treaties; NAFTA and as well as the Court of International Trade WTO dispute resolution; and other trade and the Court of Appeals for the Federal policy and legislative matters. He has been Circuit. Mr. Wall currently serves on the ranked by Chambers and Chambers Global Board of Directors of the U.S. Council for in the areas of Export Controls/Economic International Business and he is a member Sanctions and CFIUS. of the Council on Foreign Relations.

Pillsbury Winthrop Shaw a 360-degree perspective to complex busi- extraterritorial trade measures with an ness and legal issues — helping clients to understanding of the political, policy and Pittman LLP take greater advantage of new opportunities, diplomatic context in which these measures meet and exceed their objectives, and better are implemented. Pillsbury is a full-service law fi rm with mitigate risk. This collaborative work style an industry focus on energy and natu- helps produce the results our clients seek. We assist clients with international trade ral resources, fi nancial services including matters, including: export controls and fi nancial institutions, real estate and con- International Trade embargoes; regulation of foreign investment; struction, and technology. Based in the Pillsbury provides a full range of legal ser- customs compliance and enforcement; world’s major fi nancial, technology and vices to its clients related to international Foreign Corrupt Practices Act compliance; energy centers, Pillsbury counsels clients trade regulation. Our International Trade the interpretation of international trade on global business, regulatory and litiga- practice includes counseling, regulatory agreements and litigation or settlement of tion matters. We work in multidisciplinary compliance and enforcement, transactions, trade disputes; trade remedy proceedings teams that allow us to understand our cli- litigation, and arbitration. We combine a (such as antidumping investigations); and ents’ objectives, anticipate trends and bring sophisticated knowledge of domestic and trade issues that arise in transactions.

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