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One of the impacts of the financial crisis was to move regulation to the top of the agenda. There is still in most countries a political agenda and an administrative agenda, which says that you cannot just leave business to the forces of the free market, there has to be a level of regulation and oversight. One may or may not agree with that agenda but undoubtedly it is there throughout the world. Getting it wrong can have very grave consequences with criminal proceedings against the company or against individuals. You can be in a position where some of your executives are being extradited from one jurisdiction to another. You can face very detailed, very costly regulatory agency investigations across a number of different countries. You may end up with damages claims made against you. But, you know, more than any of these legal issues, the reputational consequences of getting something wrong can be very grave for the company.

Connectivity operates at three levels. First, there’s connectivity within the relevant company. What do I mean by that? Regulatory risk does not exist in isolation. Regulatory risk is part of the broader strategic operational policy issues facing the companies. In assessing the nature of regulatory risk in how you handle it, you have got to look at it within the context of the overall approach of the company to risk, the operational issues, the strategic issues that it faces. So connectivity across the company.

Second, connectivity across jurisdictions. For a global company a failure in one jurisdiction can give rise to consequences in another jurisdiction, even though the centre of the infringement is in the first jurisdiction. For example, the United States we know has a very long arm in terms of its ability to hunt down, require information, require extradition of individuals in respect of infringing activity that may have an impact in the US even though the principle area of concern is somewhere else. So connectivity across the world is important.

Third area of connectivity, is connectivity across different areas of law and different areas of regulation. You could have an issue, which could be a data protection issue, it could be an antitrust issue, it could be a bribery corruption issue, it could be a combination of all three. For example, disclosing confidential information to a competitor, there could be antitrust concerns there, there could be anti-corruption concerns there, there could be data privacy concerns there. You have got to look at these issues across the regulatory piece.