Director Summit | International Risk in Cross-Border M&A

Our mergers & acquisitions group hosted a program on “International Risk in Cross-Border M&A” as part of its Director Summit roundtable series.  We featured a panel discussion of industry observers and partners in Ropes & Gray’s anti-corruption and international risk practice to address timely issues for directors of public companies — dealing with the common international risks companies face, building an international risks program, and executing cross-border M&A transactions and managing post-acquisition risk.

How do you, as an outside director of a public company, ensure that your company has the right controls in place and an effective compliance program to conduct operations globally?

In today’s environment, companies must be prepared to address and mitigate legal and compliance risks resulting from international business operations and the operations of potential counterparties.  While not directly responsible for a company’s compliance program or internal controls, directors may be called upon to contribute to the company’s efforts to:  identify international risk red flags; assess the sufficiency of the company’s international risk compliance program; build-out the program; and evaluate potential transactions from a risk perspective.  By staying informed and asking the right questions, directors can help pressure-test management’s risk assessments.  As an outsider, being proactive may be challenging, but directors should be attuned to the risks and the ramifications.

Dealing with international risks. 

Our panel highlighted key areas of international risk companies face — sanctions and export control, anti-money laundering, and bribery and anti-corruption.  Panelists stressed the importance of a compliance program being embedded within a company’s culture and way of doing business.  The panel also spoke to the importance of internal risk assessments, especially during the due diligence and post-acquisition (integration) phases of a cross-border transaction.  The panel concluded with an overview of best practices to help directors spot and raise international risk red flags and to probe more deeply for answers from management.

For more information about our mergers & acquisitions, government enforcement / white collar crime and anti-corruption / international risk practices, please reach out to the attorneys highlighted in the Attorney Profiles and Panelist Profiles.