Stephanie Greaves, Associate Director at Laurence Simon Search discusses with Audrey Morin, Group Compliance Director at Schneider Electric, the impact COVID-19 is having on compliance functions today.
Stephanie Greaves (SG): Good Morning Audrey, thank you for taking the time today to talk to me about how COVID-19 is impacting businesses within your field of compliance. For you, what disruption has Covid-19 caused to the business and how have you responded to this disruption? What have you had to do?
Audrey Morin (AM): More than disruption, I would say Covid-19 reminded us about two key priorities. Firstly, companies such as ours have been reminded that they rely on an ecosystem over which they do not have full control: for companies, the result has been increased health and safety considerations for their employees, adapting quickly to the situation (reduced activities, working from home…) and local regulations. Secondly, with business continuity also at the forefront of our minds, we had to find ways to ensure it. At Schneider Electric, we had already implemented new ways of working, doing business and digitizing the company. As compliance professionals, these two immediate priorities have led us to understand the different consequences on the risk environment, especially when there may be a temptation to be less vigilant when it comes to processes and to focus on short-term objectives.
At Schneider Electric, a central crisis management team was set up quickly in order to support the country presidents who were put at the core of the decision-making process to ensure agility and flexibility when handling local situations. This action was fully aligned with our strategy to be “the most local of the global companies”. The Compliance and Legal teams across the world leveraged this mature crisis management process to provide an enhanced focus on ethics & compliance considerations against the backdrop of these unprecedented times. We agree on shared messages, work closely to map specific risks due to the Covid-19 crisis, and we define how to respond to local - and sometimes isolated - situations. We have also reinforced actions which allow us to be close to local management, despite physical distancing. With hindsight, the crisis has been a great opportunity for Compliance to demonstrate its added value to management and to further improve our collaboration with country presidents, who have acted as real role models in tackling such specific ethics & compliance challenges alongside those priorities linked to maintaining business continuity.
SG: Was your business and compliance team prepared for a global pandemic? If so how? Are there any new learnings or changes you have made from this initial preparation?
AM: In a certain way, we were prepared, as main considerations to ensure business could continue in a crisis (health & safety, digitization of the workplace) were already priorities for the Company. As for Compliance, last year, even our Compliance Digitization roadmap was agreed with our Chief Legal & Compliance Officer as it has been a key priority of the Legal, Compliance and SERIM department over recent years. In addition, being more present locally has been one of our defined priorities since 2019 as well the appointment of dedicated regional compliance officers in different locations together with standardizing the role of the Ethics Delegates’ network.
The crisis has brought strong outcomes in both regards: moving more quickly in terms of digitization and diving deeper into revamping the Ethics Delegates’ network, ensuring a strong, local community of delegates who are influenced and inspired by regional compliance officers, being closer to all our employees which in turns ensures local Ethics & Compliance considerations are on the discussion table.
SG: With existing supply chains being interrupted, we realise that some companies might have had to urgently find new – and untested – business partners, how are you dealing with third-party due diligence?
AM: Third-party due diligence is not a new topic for Schneider Electric and several projects to improve due diligence processes have been launched since 2019, such as a new Business Agent Process and an M&A Compliance Guide. Nevertheless, the acceleration due to COVID-19 has led to the release of local processes by some regional compliance officers to quickly meet these new demands. This will impact our due diligence working program in the second semester of 2020 to focus on partners who will have been identified as increasingly vulnerable to risk in the context of post Covid-19 crisis. Being agile in compliance is key for us, and the Covid-19 crisis is pushing us to put this agility into practice, especially in the case of due diligence processes.
SG: How has COVID impacted your team and way of working?
AM: This crisis led Compliance to accelerate the adoption of new digital tools to collaborate better and in a more efficient way - even with people located all across the world!
Our approach is digital-driven and the crisis has created an additional incentive to quickly adapt our ways of working and as well as how we provide services to this digital thinking.
Now, I think that we are no longer as we were: the Compliance professionals at Schneider Electric who are, in the main, some new joiners to the Group in 2019 and for those others who started to report to our Chief Legal and Compliance Officer at the start of 2020, found an extraordinary opportunity in this crisis to create a team mindset which is diversified and inclusive and aligned in terms of collaboration and disruptive thinking, leveraging on all the technology made available by the Company. We have collaterally created a great sense of camaraderie (and fun!), making the Company values which are applied to the team, a reality.
SG: Have you been able to visit any subsidiaries or site offices during COVID? If not, how have you dealt with this and has anything had to be put in place to avoid non-compliance or misconduct?
AM: For health and security reasons, no visits have been allowed. We leveraged the increased power of decision given to country presidents to reinforce key messages on behaviors and basic processes to be part of their considerations. In addition, we have reinforced awareness of our whistleblowing system, which relies on a website and hotlines, to ensure that people feel confident in reporting any non-compliance concerns, but also to ensure that HR and Managers, as well as local Legal teams, can play their role in reporting any potential non-compliance too. Several cases referring to issues linked to the context of Covid-19 were reported and we were able to manage these issues with relevant partners internally.
SG: In conducting internal investigations, how can data be collected? How do you monitor this and follow-up on any complaints or allegations that arise?
AM: The first thing has been to prioritize ongoing investigations taking into account their criticality and how to manage them with travel ban due to the crisis. The crisis started when we were deploying standardized governance to deal with the reported cases, and we were launching an investigation protocol: the crisis required some adaptations to ensure we took account of this new reality which now needs to be considered as a new normal.
In addition, we have had to ensure access to our whistleblowing system for employees who are not connected to a laptop but who want to report a concern. We also have had to address the effectiveness of our speak-up culture. Do people trust our system, especially in such circumstances? Again, the crisis was a kind of test of the effectiveness of our system, leading to us to launch several initiatives to improve access to relevant data, or strengthen trust into our case management & investigation protocol. In parallel, in May we reviewed our E&C governance which will lead to strengthening our ‘speak-up’ culture – this has been one of our priorities since the appointment of a dedicated Group HR Compliance Officer within the Group Legal and Compliance team in February 2020.
SG: And finally, what would you say will be the biggest challenge for you and Compliance in the next weeks and months?
AM: The biggest challenge will be to ensure that Compliance is not categorized as a group of dedicated professionals, but is spread and incorporated into the reality of the company’s processes. Compliance will have to adapt to this "business as unusual" that the post-Covid-19 crisis is announcing, ensuring centralization for stronger governance and strengthening the accountability of local managers for better effectiveness. This is the vision that our Chief Legal and Compliance Officer shared during our last 2019 Group ethics and compliance committee session, focusing on a designed, digitized and performance-driven Compliance. And what we have experienced with the Covid-19 crisis will certainly lead to concrete actions which are aligned with this vision being enforced in the coming months.
SG: Audrey, thank you very much for your time today. Take care!