If your business is engaged in international transactions you may be interested to know that law enforcement officials are increasingly collaborating across borders on investigations of a host of illegal activities ranging from the antitrust violations, to tax evasion, to bribery of foreign officials, financial fraud, and more.  No longer can you safely escape the clutches of Inspector Clouseau by crossing a border.

Due to this heightened scrutiny, companies with significant international operations are conducting more of their own multi-jurisdictional and cross-border investigations.  Of course every time you leave your home country you are bound to encounter some surprises and challenges. 

An interesting article, titled “Pitfalls of Cross-Border Investigations” identifies four important rules of the road that are worth noting: 

1. Secure relevant documents.  This may be easier said than done due to diverse document retention policies abroad, language barriers, and other technological challenges.
2. Beware of local rules when interviewing employees abroad.  Some countries have privacy laws that entitle employees to bring their own attorney or to decline your invitation to sit down and talk altogether.  Then there are additional hurdles created by language and other cultural barriers.
3. Recognize that the U.S. concept of attorney-client privilege is not universally accepted abroad.  European law in particular is at odds with U.S. law on this front.
4. Give consideration to a coordinated investigation if multiple governments are zeroing in on the same issue.

Conducting business internationally is a trap for the unwary, regardless of whether you have a substantial footprint overseas or are just starting out.  That’s why I’m delighted to be interviewing international legal expert, Carol Emory on December 3, 2009 at 8 pm Eastern ( 5 pm Pacific) about the potential legal pitfall of international business transactions. 

Click here for more information about how you can submit a question that I’ll ask Carol on December 3^rd and mark your calendar to join us for this valuable and complimentary program.

Copyright © 2009 Corporate M.O., LLC

Economics tells us we should engage in rational decision making.  We shouldn’t take irrational risks.  Okay, then tell me why do so many successful, high-profile, and otherwise smart individuals take what appears to irrational risks that can turn their world upside down?   

Enron financial engineers, the Wall Street wizards who helped implode the financial market and deepen our recession, and of course the parade of sex scandals such as Governor Elliot Spitzer and his call girls, former presidential candidate John Edwards and a campaign consultant with a love child, Governor Mark Sanford and his Argentinean soulmate mistress, Senator John Ensign and the wife of a former top aide, and just last week – David Letterman and certain Late Night Show staffers, all demonstrate a lack of “good judgment” or rational risk taking. 

What were they thinking?  How could smart people get it so wrong?

Senator Tom Coburn, in talking about Senator John Ensign who admitted to having an affair with the wife of his close friend and former top aide, offers some interesting insight.  Coburn was recently quoted in the New York Times as saying, “John got trapped doing something really stupid and then made a lot of other mistakes afterwards.”  But my favorite line is when he said, “Judgment gets impaired by arrogance.” 

 Bingo!

Coburn’s observation dovetails with the research done by behavioral economists.  Those are the folks who look below the surface at what we do and examine how decisions are really made.  Among the interesting findings in this field is the role of overconfidence.

Overconfidence contributes to hubris and arrogance.  It causes people to take huge risks.  Their perceptions of invincibility can lead to large scale risk taking and have legal implications that trigger liabilities ranging from negligence to brazen malfeasance, such as fraud. 

Organizations seeking to effectively manage their enterprise wide legal risk need to be cognizant of this behavioral flaw and blind spot it creates.  The best way to guard against it is to properly train all employees, including the most senior AND to create a system of rational checks and balances to protect the business from poor individual judgment.   

The conflict between behavioral economics and business economics presents serious and continuous leadership challenge.

Businesses today are getting sued more than ever before. A lawsuit can pop up almost any time and any place. A customer slips and falls at your store or office, an employee or customer complain, or competitor sends a demand letter. How do you protect yourself and your business?

If you’re not sure and you want to be prepared for an event that is bound to happen at least once during your business career, please join me for a complimentary teleseminar on September 30, 2009 at 8 pm Eastern (5 pm Pacific) when I’ll be interviewing Ms Kathy Lang, a member and practice department manager with the firm of Dickinson Wright in Detroit, Michigan, about what to do if you think you might get sued. (To get the dial in information, visit askthenononsenselawyer.com )

Ms Lang has been listed among the best lawyers in America and among Michigan’s Super Lawyers and she’s currently lead counsel for Ford Motor Company in pending lawsuit against an exclusive supplier to Ford with total claimed damages in excess of $5 billion.

One thing is for sure. Kathy understands litigation and she’s seen the inside of the courtroom many times in her distinguished career across a wide spectrum of industries and cases, including product liability litigation, trademarks, copyrights, and patents litigation, insurance litigation, as well as a wide range of industries. She knows what trips companies up.

Avoid costly trial and error by arming yourself in advance with knowledge that could save you money. Invest a few minutes now and sign up for this free program by visiting askthenononsenselawyer.com .

Americans still admire dignity.  But the word has become unmoored from any larger set of rules or ethical system.

David Brooks, “In Search of Dignity,” New York Times,  July 7, 2009

Brooks’ article speaks of dignity as a moral strength, a code of behavior that places the greater good above personal interests.  It’s a fascinating concept, one that is closely aligned with integrity and ethics.

Seems to me that if we’ve been “unmoored” that getting “anchored” to core values is a good thing and precisely what thousands of corporate mission statements and ethics policies do.  Yet, living up to the promise of core values is much tougher to do. 

Unfortunately, the lack of shame associated with undignified business behavior pursued in the name of profit promotes an anything goes attitude.  It leads to more self serving behavior until new laws are enacted to put a stop to it.  Recent examples include the off the books accounting practices of Enron, the derivatives of Wall Street, and of course the many contributors to the real estate bubble.

Imagine what it would be like if more businesses did more of what they “should” do instead of what they “can” do under some legal loophole.  It would simply the legal aspects of business.

If only we could restore the “dignity code.”  

 © Corporate M.O., LLC, 2009