The Law or One’s Reputation
A recent conversation I had with a senior lawyer led me to consider banks’ approach to staying within the law whilst managing one’s reputation.
This very eloquent and obviously highly intelligent lawyer had just been employed by a bank to examine how the organisation managed its legal risk.
He was shocked to find that the organisation was taking a very conservative approach to staying within the law to the point where it was turning away vast amounts of business.
I pointed out that perhaps it was more concerned about its reputation and the way new business would be perceived by judgement-orientated regulators and the media.
His issue was the fact that these business decisions were being made by legal officers.
Where in your organisation are the margins between legal and reputational risk managed?
Isn’t this a job for some form of reputation risk committee populated by senior members of management, compliance officers and lawyers?