You want to challenge people to get them to raise their game, as opposed to criticizing them, which makes them raise their defenses.

William D. Green, chairman and C.E.O. of Accenture, as interviewed by the New York Times, November 22, 2009.

Mr. Green makes a good point, one that also has valuable implications for managing legal risk and legal costs. 

According to Green, caring is one of the most important traits a business leader can possess.  ”Nothing today is about one individual,” he says. “[It's] all about the team, and in the end, this is about giving a damn about your customers, your company, the people around you, and recognizing that the people around you are the ones who make you look good.”

It therefore helps to remember that when employees raise an issue or identify a concern, they are trying to help you and the company.  They do it because they care and want to do a good job for you.

On the other hand, employees whose defenses are raised typically don’t voice issues or concerns.  Their top priority is making sure they don’t get blamed for problems, not helping to avoid them.  As a result the flow of meaningful information is choked and problems, including legal issues, surface only when they’re too big to hide. 

Listening and caring lets you make small course corrections that sidestep liability in the fraction of the time and cost it takes to make a macro course correction later.  Best of all, by raising your employees’ game you’ll also raise your company’s performance.

Copyright © 2009 Corporate M.O., LLC

For unsuccessful companies, risk is a hot topic in the depths of a recession.  For great companies, it’s a hot topic at the height of a boom.

Geoff Colvin, “Time to Plan For the Next Recession,” Washington Post, September 29, 2009

Managing business risk when times are good is smart advice.  Managing litigation risk before you get sued is also smart advice.  

If you’re wondering about what you should do before you get sued, be sure to join me on Wednesday when Ask the No Nonsense Lawyer interviews attorney Kathy Lang of Dickinson Wright on what to do if you think you’re about to get sued.

This complimentary program starts at 8 pm Eastern (5 pm Pacific) and you can receive the call-in information by submitting a questions at Ask the No Nonsense Lawyer.  Hope to “see” you then and also hope that yours is one of the questions I’ll be asking Kathy Lang on Wednesday. 

Be a great company.  Click here now and get ahead of the liability curve.

We thought he knew and he definitely should have known.  He’s an investor.  It’s his job to know.  We thought the tape was damning.

Jury foreman David Murphy discussing the conviction of Frederic Bourke Jr. (the co-founder of handbag maker Dooney & Bourke Inc.) of conspiracy to violate the Foreign Corrupt Practice Act in connection with the alleged privatization of the state-owned oil company, Socar, in Azerbaijan as reported through Law.com.

The tape the jury foreman was referring to was a taped phone conversation between Bourke, another investor in the venture, and their lawyer.  The conversation centered on how to structure the deal and the subject of bribery came up.  Bourke’s defense contended that he was merely asking questions about it as part of the due diligence – to verifying the legitimacy of the deal. 

Some of the jurors interpreted it as Bourke knowing about the bribes from the beginning and participating in the creation of dummy companies in an effort to shield himself and the other investors from liability.

The case is expected to be appealed.  But regardless of the outcome, a few lessons are clear:

• Alleged violations of the Foreign Corrupt Practices Act are serious business, and under the new administration more serious than ever.
• Due diligence and legal literacy go hand in hand. Jurors expect investors and managers to be informed. It’s their job.
• What turns a business communication, such as a tape recording, into a smoking gun document is multiple interpretations. It therefore pays to follow smoking gun rule #7 and strive for clarity and accuracy.

Navigating cultural differences is one of the biggest challenges of doing business abroad, particularly since they mask latent legal issues.  If you’ve ever wondered about how to avoid such pitfalls with respect to doing business in greater China, please click here to learn more about my complimentary teleseminar next week with Nicholas V. Chen, a partner with the Pamir Law Group.

©Corporate M.O., LLC 2009

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