Legal Departments Of The Year: Praxair Safeguards Integrity With Aggressive Compliance Efforts
"We feel that compliance is part of our DNA as a company," Breedlove said.
Nielsen, who spent two terms as a state senator in Connecticut and worked as a legal counsel for former Massachussetts Governor Mitt Romney before returning to the private sector, was hired by Praxair in 2009. He said they were thrilled with the Law Tribune's accolade and explained that the one of the company's fundamental management principals is that "ethics and business are inseparable at Praxair."
Over the past few years, the company has organized 27 compliance review boards, one in each of its offices. The boards are made up of legal, human resources and operations managers. Board members work together to develop and provide training exercises.
Nielsen's team of 25 lawyers are an important piece of the program, because they study changes to the relevant laws, including anti-trust rulings and recent prosecutions under the FCPA. The lawyers then provide frequent updates to the programs, which are called "modules." The training programs are designed to ensure employees don't violate ethical provisions of the law when doing business with any government entity.
In receiving instruction on how to do business with governments, Nielsen said, all Praxair employees are told to get approval of the legal department before submitting bid proposals. They are trained on restrictions involving gifts or payments from government officials. "This is very important," Nielsen said, "because non-compliance of these requirements can create legal exposure for both the company and the employee, including possible criminal prosecutions and substantial monetary fines...Our goal is to make a basic understanding of these regulatory areas part of Praxair's ingrained culture."
Over the past couple of years, Praxair has also developed an Integrity Hotline. The 24-hour hotline is staffed by a third-party service and fields complaints from Praxair workers involving alleged wrongdoing, dishonesty, theft, harassment or other employment law-related concerns. Reports can be made anonymously, and there is a strict policy of non-retaliation in place to protect anyone who uses the hotline. Nielsen said the company is committed to investigating all reports. When possible, the outcomes of those investigations are shared with those involved.
Nielsen said that since he joined Praxair as its compliance chief, he's learned several important lessons. One is the fact that companies must take care to know all of their employees and consultants very well.
"Anyone authorized to work or interact with a government officials on the company's behalf should be subjected to a thorough background check," he said. "One cannot assume that an agent or consultant is acceptable solely because he or she represents other well-known multi-nationals. Third-party background checks are a must."
Although most of the compliance work is handled internally, Praxair does sometimes use outside counsel. "There are times when an internal investigation can be best performed by outside counsel because of the need for greater independence, possible privilege protection, or because of scope and resource demands," Nielsen said. "Outside counsel can be particularly helpful if there is a likelihood of follow-on enforcement actions or civil litigation."
In building his own company's program, Nielsen's enthusiasm for corporate compliance has made him well-known in the field. He has led seminars on the subject across the county, in which he stresses the importance of a company to build public trust by showing that they adhere to all laws. Nielsen said he continues to be inspired by a lesson his former life in politics taught him about maintaining a positive reputation. "In the political world, I saw instances where a positive reputation, painstakingly built over the span of years, could be lost overnight," he said. "The same is true in the business world. To me, companies need to invest in compliance, and constantly be on their guard."•