CNH Industrial: We’re boosting our compliance budget

Michael Going is a bilingual compliance chief. He may indeed be bilingual when it comes to languages. But he has worked at several inhouse counsel jobs for multinational companies, the latest being the most recent version of what was once Fiat Industrial, the maker of Iveco trucks and heavy equipment. An American, Going has worked for CNH Industrial or its predecessor companies since 2006, moving up the chain from North American general counsel, to global general counsel, to chief compliance officer. Along the way, he has learned how to be a good corporate citizen in a highly regulated industry, with employees on several continents. U.S. correspondent Anthony Paonita talked to Going about his job, how the legal department shows its value to the rest of the company, and what it means to be a global compliance chief in a multinational environment.

You’re now a compliance chief instead of general counsel. Why? Is it because they separated the compliance function out of legal?
It was tied to the merger in 2013, where CNH Industrial was born. Until that point, compliance was a shared function between legal, human resources and audit. And after the merger, there was a reconciliation of jobs, and a desire, given the increasing focus on compliance, to create a more explicit function within the organization. So I was tapped to head up compliance. I suspect that it’s because I’m American and the U.S. tends to push more toward compliance. And because we had a good compliance function at CNH Global, it made sense for me to head it.

How many people work in compliance at CNH?
About 25. One of the areas is international trade compliance, and we have a sizeable group of people there, 50 percent. The rest are in general compliance.

What is your compliance program like?
In the Middle East, we conducted a mock dawn raid/training exercise. External counsel came in like they were authorities, interviewing employees, gathering laptops, and investigating or reviewing what’s on the laptops to find out if there were problematic communications. A few days after that we had a debriefing and training session.

Separating law from compliance has become best practice in some places. Some think it’s a terrible idea, to have legal cede such an important job to another department. Do you have any opinion?
I can see merits to both approaches. I think regulators like the separation. They like to see direct communication to the audit committee or the board or the CEO. And I think that was an important consideration for our senior management.
At the end of the day it is difficult to describe how the compliance function differs from the legal function. One might say compliance is more proactive trying to educate and inform colleagues about the law, and in trying to help colleagues develop systems, which is beyond what the legal function typically does. The legal function sometimes takes a more reactive approach.

How big is the legal department?
Total is about 125 people.

How do the legal and compliance departments create value for the company?
We suffer in this challenge, as do all other legal/compliance functions. Does the “business” give proper credit to the function for avoidance of risk and financial harm? If your company does suffer due to a verifiable compliance problem (such as our fine in the European Commission investigation of the medium and heavy duty truck OEMS; we paid about $550 million last year), I think that you don’t have to work so hard to convince management that investing in compliance is a good thing.
Can you give me an idea of the compliance department’s budget?
I cannot disclose the budget. But I can say that we have increased our budget each year since the formation of CNH Industria. This is a strong sign of management’s commitment.

How does CNH Industrial’s legal department (and now, your compliance operation) choose outside counsel? Do you have a panel? If you have a panel, do you review who’s on it regularly? What are the criteria?
We don’t have a formal panel or process. But we take a consistent approach toward selecting counsel. For specific types of matters we use a single firm. For example, for SEC matters we use Sullivan & Cromwell. For financing transactions in the United States, we use Greenberg Traurig. They have a long and deep understanding of CNH Industrial and how we’ve handled such matters in the past. In the U.S., for certain types of recurring products liability litigation, we have designated a primary national firm, Quarles & Brady in Milwaukee. Generally speaking, though, our attorneys have many years of experience in their jurisdictions and have developed market knowledge and trusted relationships with local firms.
Last, we use a very few transnational firms, such as Baker & McKenzie, for multi-jurisdictional issues.

You’ve been inhouse most of your career. Did you ever work in private practice?
I did. For about four years I worked for Duane Morris in Philadelphia.

What kind of skills do you need as an in-house lawyer. Is it different from being a law-firm lawyer?
It’s a different perspective. And it’s something in-house lawyers get frustrated with outside counsel than anything else, except for expensive rates. You need to understand in a deep way what your clients are trying to do. You need to demonstrate that to them to earn their trust and respect. You need to talk in their language, instead of impressing them with legal jargon. You also need to think more strategically than external counsel, who are usually brought in for a particular task, such as litigation or an agreement.

Given that the origin of your company is Italian, what is it like to be an American in a company that was a Fiat spinoff?
There are cultural differences. And depending on your perspective, the differences are either a burden or an exciting thing. Just different things like expressions, the willingness to share information. Communication is a real challenge. You assume people will act like you do, and you have to have a more mindful way of how to interact with other people. Strangely enough, though, the law, when you come to the fundamentals, is not that different..

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