-120 Years of Thinking Ahead-QUARTERLY Q/3 – 2019 Welcome to MyD&I Name Password Sign in We are creating the best digital processes together with our clients. For further information mydi@dittmar.fi-120 Years of Thinking Ahead- P4 THINKING AHEAD Internal investigations - just another buzzword or a diverse tool for responsible management Jan Ollila Senior Partner P6 CREATING SUSTAINABLE VALUE Will corporate responsibility legislation be enacted in Finland? Hanna-Mari Manninen Partner Kari Lautjärvi Partner Laura Numminen Associate P10 INNOVATION POWERHOUSE New Partner at D&I: Anna Haapanen Anna Haapanen Partner P16 INNOVATION POWERHOUSE From innovation to business and beyond Anna Haapanen Partner P18 TRANSACTION POWERHOUSE The data explosion and M&A Gabrielle Dannberg Senior Attorney P20 DISPUTE POWERHOUSE What to consider when preparing for disputes with UK companies in light of Brexit Heidi Yildiz Senior Attorney P24 SUBSTANCE MATTERS New Working Hours Act brings changes to working hour arrangements Mika Kärkkäinen Senior Associate TABLE OF CONTENTSQUARTERLY Q/3 – 2019 Internal investigations - just another buzzword or a diverse tool for responsible management THINKING AHEAD P4 They say that there is nothing new under the sun. At the same time new buzzwords constantly emerge, also in the world of general counsels and us attorneys advising them. Right now, there’s a lot talk about ”Internal investigations”. -120 Years of Thinking Ahead- First it was ”Corporate governance” that came into focus around the turn of the millennium. Corporate governance is all about how corporations are controlled and operated. Governance structures and principles aimed to identify the allocation of rights and responsibilities among different participants in the corporation and to include the rules and procedures for making and executing decisions. Then came ”Compliance”, i.e. conforming with rules and requirements. Compliance can be achieved through management processes which identify the applicable requirements (defined for example in laws, regulations, codes of conduct, contracts, strategies and policies), assess the state of compliance, assess the risks and potential costs of non-compliance against the projected expenses to achieve compliance, and prioritize and initiate any actions deemed necessary. Recently ”Whistleblowing” emerged on the agenda of corporates. A whistleblower is a person who exposes information or activity that the whistleblower deems illegal, unethical, or not correct within the organization. The alleged wrongdoing can be classified in many ways: violation of company policy/rules, laws or regulations. A whistleblower may expose e.g. fraud or corruption. The EU has just passed legislation protecting whistleblowers. After ”Corporate governance”, ”Compliance” and ”Whistleblowing” comes ”Internal investigations”. It is the logical next step when compliance fails, whistles have been blown and there are suspisions of wrongdoings. What do we need to understand about internal investigations? An internal investigation is an investigation instigated by a company’s management or board to find out whether a breach of compliance/a wrongdoing has occured, without (at least initially) engaging the authorities. The goal is to identify the problem so as to allow for its rectification. There are no uniform rules for how an internal investigation is to be conducted. Some of the best known internal investigations that have led to published reports in the Nordics have been by Telia, Nordea and Danske Bank. Each of these investigations have been related to suspisions of serious misdoings by employees of the companies in question. It is interesting to note how different the reports are. Two of the reports have been prepared by external law firms and one by the corporate’s own organisation. The internal investigation carried out by the corporate’s own organisation was validated by an external law firm. So what should the management or the board think of when considering instigating an internal investigation? • The objectives of the investigation • The scope of the investigation • The method for reporting of findings • Publicity and media • Possible legal exposure • The identity of the investigator • The independence of the investigator It can be argued that the result of an internal investigation is all the more reliable the wider the scope, the more transparent the process and the more qualified and independent the party conducting the investigation. But situations vary and one size definitely does not fit all when it comes to internal investigations. There is no one right recipe for how to best further the interests of a company in a situation where suspisions of wrongdoings emerge. Wrongdoings and even potential wrongdoings by high-profile corporates always raise a lot of public interest and may significantly affect the brand value and share price of the company in question. Since internal investigations are carried out under sensitive circumstances, it is important that the investigation itself is carried out properly and without breaching any rules or violating any rights of employees or third parties. Above all, it is crucial to really understand all the implications of publicity or secrecy around potential misdoings. An internal investigation may be the right first step in a number of different scenarios involving potential compliance problems or serious potential wrongdoings. But a responsible management or board needs to carefully consider how to use this diverse tool. Jan Ollila, Senior Partner @JanOllila Will corporate responsibility legislation be enacted in Finland? CREATING SUSTAINABLE VALUE Corporate responsibility has become a significant factor defining the operations, value and brand of companies. P6-120 Years of Thinking Ahead- Even though Finnish companies have no clear direct legal obligations concerning any negative impacts that their subsidiaries and independent suppliers or subcontractors they use may have in relation to human rights or environment, stakeholders’ expectations concerning responsibility have increased. In addition, there is currently pressure for common operational requirements from market operators themselves. Several countries have enacted or are planning to enact special corporate responsibility legislation with which they can affect the practices related to supranational companies’ value chains while there are conflicting demands of binding regulations and soft law regulations. Such corporate responsibility laws often have extraterritorial dimension because they as national laws regulate the activities of companies operating in their area even outside of national borders. In practice, corporate responsibility legislation based on companies’ due diligence obligation imposes on companies an obligation to request information concerning social, human rights-related, environmental and other equivalent risks and requires public presentation of the risk management mechanisms adopted as a result of such mapping. However, there are significant differences between corporate responsibility laws, for example, in terms of the legal basis, material and personal scope of application (or scope of application concerning legal persons), definition of value chains, obligation to request information, obligation to disclose information, other obligations and the content of sanctions. In Finland, the Ministry of Economic Affairs and Employment has recently informed that it will procure a judicial analysis of regulation and legislation on corporate social responsibility. Such analysis will focus on establishing a method for nationally implementing corporate social The judicialisation developments in corporate responsibility may be considered a major win in the prevention of negative impacts that companies have in relation to human rights and environment. “ responsibility legislation based on a due diligence obligation.This is no surprise as the programme of the current Government includes several references to enacting corporate responsibility legislation. Furthermore, such legislation has been actively promoted by both the civil society and companies. Corporate responsibility legislation may take effect in Finland so that it originates from the EU either as an EU Regulation that is directly applied or as national legislation that has been harmonised on the basis of an EU Directive. If there is no progress in terms of the regulation of corporate responsibility in the EU in the next few years, it is possible that corporate responsibility legislation will be enacted in Finland independently as a national law. In terms of the coverage of corporate responsibility and the equality of companies, regulation at the EU level would be preferable. The objective and scope of application of corporate responsibility legislation should be the prevention of human rights violations and environmental damage attributable to the business operations of companies registered in Finland, and possibly also companies operating in Finland – both in Finland and outside of Finnish borders. The scope of application could be limited, in accordance with general practices, to companies exceeding specific financial limit values, having higher turnovers and/ or number of employees, as is the case with corporate responsibility legislation in France and the EU’s reporting directive. In addition, the due diligence obligation should be imposed on the companies falling within the scope of application of the corporate responsibility legislation. A company’s entire value chain or its parts would be included within -120 Years of Thinking Ahead- the scope of the due diligence obligation. Moreover, a standard concerning appropriate due diligence would be defined, and the standard might in practice mean that there are various operational obligations. Violations of the due diligence obligation, as set out in the corporate responsibility legislation, are often related to various legal considerations that often concern, in particular, our current civil provisions on damages and partly also administrative and procedural sanctions. In addition, the relationship between the duty of care applied to company management under the Limited Liability Companies Act and any future due diligence obligation under corporate responsibility legislation should be clarified, and the same applies to the entire range of sanctions for violations of the duty of care and due diligence obligation. Our corporate responsibility legislation should also include an overriding mandatory rule on the basis of which the laws of Finland would be applied to any claims for damages presented on the basis of the corporate responsibility legislation instead of applying the legislation of the country in which the damage incurred, as stipulated in the Rome II regulation. The judicialisation developments in corporate responsibility may be considered a major win in the prevention of negative impacts that companies have in relation to human rights and environment. However, it must be ensured that aforesaid regulation does not become an unnecessarily heavy administrative burden for companies and that the objectives set by the regulation and the realities of business life are reconciled. Source/further information on this topic: Lautjärvi Kari, Yhtiön johto ja yhteiskuntavastuun oikeudellinen ulottuvuus (Company management and the legal dimensions of corporate social responsibility), Defensor Legis No. 4/2019. Hanna-Mari Manninen, Partner Kari Lautjärvi, Partner Laura Numminen, Associate Corporate Advisory and CSR 120 YEARS OF THINKING AHEAD - CREATING SUSTAINABLE VALUE Sustainability is a central part of D&I’s culture, legal advice and role in society. As a law firm, we want to promote justice and serve society in a sustainable manner from the perspective of our clients, personnel and other stakeholders. The development of sustainability is a continuous process for us. In order to be able to act even more responsibly, we have clarified our own view of sustainability and approved our own principles concerning corporate responsibility. This helps us provide the best possible insightful advice also to our clients. We believe that corporate responsibility will be increasingly regulated in the future. However, the direction must be clear even without regulation.Next >