Legal Departments Of The Year: Praxair Safeguards Integrity With Aggressive Compliance Efforts
It comes with the territory. If a company that does business around the globe is going to keep its lawyers out of court, it had better find an effective way train its workers on the myriad regulatory laws and regulations they must abide by.
At Praxair, a leading manufacturer of industrial gases based in Danbury, the company's 50 in-house lawyers take that duty seriously. The benefits are many, not the least of which their efforts save the company money in litigation costs.
"It's also about safeguarding our company's integrity," said Mark Nielsen, the assistant general counsel and chief compliance officer at Praxair. "It's critically important that we maintain the trust of our customers and our employees."
The company, which does business in 50 countries worldwide to the tune of $10 billion in annual sales, is what Nielsen called "strongly committed to performance." But when a company has a goal of strong sales performance, there can be a lot of "pushing and pulling" to gain business and influence, he said, especially in developing markets where business ethics might be somewhat different than they are in the U.S.
The company's legal department is responsible for making sure that all business transactions are done under the strictest of ethical and legal scrutiny. And while no compliance program can prevent all litigation — Praxair still encounters environmental, tax, anti-trust and employment claims in the ordinary course of business — the compliance program has been directly responsible for helping the company reduce litigation costs, Nielsen said. "Compliance is definitely a priority," he said.
In recognition of Praxair's aggressive compliance training programs and innovative local compliance review boards, the Connecticut Law Tribune has named its legal team one of the Legal Departments of the Year.
Praxair's legal department helped to create and lead a training program aimed at protecting the 26,000 employee company from running afoul of regulatory laws, ranging from those dealing with anti-trust and environmental protection to employment-related whistleblower claims. One of the biggest focuses in the past year has been on the Foreign Corrupt Practices Act, which bars U.S. companies from providing improper payments or gifts to foreign officials in order to facilitate business interests. FCPA prosecutions have increased significantly in recent years.
James T. Breedlove, Praxair's general counsel, joined the company in 2004 after working as senior vice president and general counsel at GE Equipment Services. He brought with him extensive experience in corporate governance, antitrust and litigation management.
Under his leadership, along with that of CEO Stephen F. Angel, the in-house compliance program has been expanded. For example, the program now includes an internal investigation component to ensure that employees know that accountability exists for all business transactions in which they are involved. The advantages of a robust compliance program are many, Nielsen said.
Praxair's lawyers train their management executives how to avoid violating anti-bribery and other regulatory laws, to ensure a culture of ethical business practice from the top down. By conducting regular compliance training workshops for managers and conducting internal reviews of its own global business deals, Praxair has managed to avoid adverse prosecutions for alleged violations of the FCPA.