Q&A: Regional Ethics and Compliance Counsel

During 2007, Baxter bolstered its international focus on ethics and compliance by embedding regional compliance counsel in Asia Pacific, Europe and Latin America. These attorneys counsel business teams on matters involving ethics and compliance, conduct compliance assessments to improve operating and control procedures, identify and lead educational opportunities and share best practices across regions. In addition, these attorneys have re-energized the Regional Compliance Committees by positioning them as steering committees that help prioritize regional risks. The counsel also serve as sounding boards on the design and implementation of compliance programs and as ambassadors of Baxter’s ethics and compliance standards and procedures.

Celina Teh, based in China, is the regional compliance counsel for Asia Pacific; Lori Reber, based in Switzerland, is the regional compliance counsel for Europe; and Maria Leonor Rios, based in Brazil, is the regional compliance counsel for Latin America.

What are your responsibilities as regional counsel?

Celina Teh: We serve as dedicated ethics and compliance resources for each of the regions. It’s our responsibility to make sure each region has a cohesive team that champions ethics and compliance and clearly communicates Baxter’s priorities, as well as to establish a strong internal infrastructure with programs and initiatives to help drive compliance with all relevant laws, regulations and policies.

Lori Reber: To provide meaningful legal advice and improve practices in a systematic way, we need to combine the knowledge of Baxter’s ethics and compliance policies and practices with a solid understanding of how each business is run and the risks it faces.

Maria Leonor Rios: Raising awareness and providing relevant training that connects to real issues are also critical. Employees understand that Baxter has high expectations in ethics and compliance, and the number of questions and issues they are raising is increasing. We ensure that people are aware of the range of channels available to them for this purpose.

What level of support do you have within the company?

Celina Teh: The Regional Compliance Counsel all report directly to David Resnicoff, Baxter’s Associate General Counsel and Vice President, Ethics and Compliance, and work closely with the corporate Ethics and Compliance group based at the global headquarters as well as our counterparts in the other regions. Within our regions, we report to the regional president. My Regional Compliance Counsel counterparts and l are well placed to influence and collaborate with leaders within the businesses.

Maria Leonor Rios: The Latin American management provides me the space to do my job in the way that’s most effective, for example by writing an article for the region’s internal newsletter, or presenting to the leadership team or at the countries’ annual sales meeting.

Lori Reber: Each regional counsel has dedicated support within Ethics and Compliance at our headquarters. We three regional counsel also regularly share best practices. Importantly, our legal colleagues work closely with us.

How do you assess compliance risk and identify possible issues in your regions?

Lori Reber: One of our main activities is conducting country compliance assessments in conjunction with the corporate audit and management teams. Through these audits, we work to fully understand the business and its activities, and then identify potential areas of compliance risk and possible solutions as well as best practices to share across the company.

This involves interviewing employees and reviewing documents such as employee expense reports, profit and loss statements, and statements regarding payments to healthcare professionals. We compare findings to U.S. laws that apply globally for U.S. companies, local laws, company policies and industry codes of conduct that Baxter endorses. After the assessment, we report to local and regional management and the country team prepares an implementation plan to address our recommendations. So far, we’ve conducted nine such assessments across all regions, and plan at least 14 more this year.

What are some of the issues and challenges that you face?

Maria Leonor Rios: The reality is that in Latin America, as in some other regions, companies may face issues related to corruption. We address this in two ways. First, we ensure that our support of product studies and the medical community is at all times appropriate and compliant with local and U.S. laws. Second, we sell and offer for sale all of our products solely on the basis of efficacy, patient safety, and overall product value. Baxter prides itself on the fact that it is an ethical company that holds itself and its products to the highest ethical standards.

Lori Reber: Understanding and managing compliance issues in a global environment is complex, partly due to the range of regulations we must follow. Despite being Member States within the European Union, each European country has its own rules and regulations, as well as industry codes of conduct, that apply to Baxter when it interacts with physicians practicing in those countries. This complexity is apparent when, for example, Baxter invites physicians from various countries to a scientific meeting. Depending on the countries, Baxter may need to obtain advance approval from a country medical association, the Ministry of Health, the physician’s employer or other external entities. As a result, we must consider many rules for a single meeting. We work closely with the local teams to ensure local requirements are met.

Celina Teh: Asia Pacific is a vast and diverse region, both geographically and in terms of the applicable laws and regulations. The region is characterized by very different cultures, languages and stages of development, in economic terms as well as the state of the healthcare industry. There is no short cut to addressing the challenges presented by this diversity. Making in-roads on ethics and compliance issues requires engaging with local teams and business leadership and demonstrating understanding of the local environment, conditions, challenges and competitors. At the same time, we need to be clear that Baxter’s practices must comply with local laws and the U.S. Foreign Corrupt Practices Act wherever we may operate.

Despite this diversity, issues related to interacting with customers – such as hospitals and healthcare professionals – are common worldwide. For example, this includes any payments or benefits in kind given to a healthcare professional, non-profit or patient organization. Baxter has developed grant and donation policies that reflect regional differences to provide guidance to employees.

How do you ensure that people throughout the company understand the importance of compliance?

Maria Leonor Rios: Having an education program is critical, for example providing training for the sales force, finance staff, lawyers, government affairs and anyone else involved with grants and donations. These trainings must be broad, and cover local law, U.S. law that impacts U.S. companies abroad, and Baxter’s policies. A key focus is to make sure that Baxter is absolutely compliant from the perspective of the U.S. Foreign Corrupt Practices Act.

To extend these efforts further throughout the company, during the last year we have also introduced compliance committees in Brazil, Colombia and Mexico as well as a committee for emerging markets. Whereas the regional committee provides high-level, strategic guidance, the country committees are more operational, for example delivering trainings that we help them develop. Other regions have adopted this model as well.

How does Baxter benefit through ethics and compliance?

Lori Reber: Baxter has long known that compliance is a competitive advantage and is essential for a sustainable business. Many business partners want to work with companies that hold high standards – that they can trust to do the right thing. Likewise, patients, physicians and the public expect companies to act ethically and according to the law.

Celina Teh: Our aspiration is for Baxter’s commitment to ethics and compliance to be a competitive advantage. We’re very committed to this from the top down, and across the board. We want to be ahead of the curve, helping to raise the bar within the industry. We want key opinion leaders to say we should work with Baxter due to superior products and strong ethical practices. Of course, there’s sometimes a belief that changing practices from what competitors might be doing could put us at a disadvantage. For example, an employee might believe that if they don’t take a doctor to an expensive restaurant and their competitor does, they could lose sales. That’s a real concern. To address this, we counsel the business to highlight quality and innovation: we don’t compete on meals but rather on the quality of our products. We believe that the industry is changing as well and standards are raising every day. Baxter will benefit by being ahead of the curve.