Lockheed GC Maryanne Lavan discusses the challenges of running a massive law department in the high-risk, highly regulated aerospace industry.
CCBJ: You’ve had an array of roles at Lockheed Martin, including outside the law department in areas such as ethics and internal audit. Tell us about your past and your current role and what you've learned along the way.
Maryanne Lavan: I started in the legal department at Lockheed Martin in 1990. Then I moved over to ethics, and from there I moved to internal audit and then back into the legal department.
The ethics role was a move towards more of a compliance role, whereas before I was general counsel for a business area. Internal audit helped me accumulate business acumen and obtain exposure to the entire corporation.
Leaving the legal department helped me become a stronger general counsel in terms of understanding the entire corporation, understanding compliance roles and having more business acumen. The opportunity to move around and gain all of these diverse experiences has been tremendously helpful to me in my career, and it really speaks to the value that Lockheed Martin places on career development and cultivating a diversity of perspectives among its employees.
Aerospace and defense is a highly regulated, high-risk sector globally. How do you and your department manage the significant regulatory and compliance challenges you face, including navigating myriad export laws and regulations, exposure to bribery and corruption risks, and the challenges of partnering with smaller suppliers along a global supply chain that may have weaker controls and oversight?
Here at Lockheed Martin, we are fortunate to have strong legal and compliance teams, and the ability to specialize. We have legal and other professionals with expertise in export compliance dedicated to that area.
In terms of ensuring compliance, we have a very strong process for vetting our consultants. We have levels of increasing reviews as the capacity of the relationship increases, and everyone who does international business is trained in compliance with the Foreign Corrupt Practices Act, UK anti-corruption strategy and other international anti-corruption regulations.
We have two people who are focused on supply chain from a legal perspective, and they work with the professionals in that business unit to ensure compliance. Together, we are constantly monitoring the support we have throughout our entire supply chain.
In terms of smaller suppliers and our global supply chain, we also work directly with our supply chain and ethics experts. Our ethics department actually mentors small business suppliers, providing them with online resources to help build effective compliance and anti-corruption programs.
A significant percentage of your business is with government customers and defense agencies. What special challenges do you and your team face as a government contractor subject to layers of scrutiny and oversight other businesses do not face?
It’s really no different than any other highly regulated industry. I don't think there's anything specific to us, as a government contractor, that we are working through. Certainly there are government contract laws and requirements that we have to be familiar with, but we have people with expertise in government contracts, with the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation. It may be a slightly different name, but it's the same requirements that most regulated businesses have.
Working in a technologically advanced market, the A&D industry faces major challenges regarding intellectual assets subject to infringement and other outright theft in markets where IP protections may be weaker or even nonexistent. Where are the most serious threats for loss seen, and how do you manage them?
We are an innovative company. Our focus on innovation requires us to protect our intellectual property. We have people in the legal department who are IP experts, and they work with their business counterparts to make sure our innovations and our IP are protected. In terms of national security, we also have to watch and protect our IP assets. We must make sure that we're very assertive in our protection of our IP.
A high percentage of FCPA and other bribery corruption cases have arisen from the use of third party agents, which many businesses see as an indispensable, if risky, resource. How do you balance this necessity with risk in your dealings with agents and across business generally?
There would never be any business situation worth us, in any way, challenging or questioning our ethics and integrity. We would walk away from business we didn't feel we could win properly. This flows directly from our core values: to do what’s right, respect others and perform with excellence.
We do have international consultants, and we thoroughly vet them before we hire them, and then we continue to do our due diligence on them throughout the time they represent us. We are constantly screening for any adverse media about them, and we follow up with additional questions as needed. We also require them to undergo regular ethics training. Our business compliance is focused on making sure we have the strongest agents representing us in an ethical manner.
Cybersecurity and privacy concerns must weigh heavily on you and your team. Talk about the threats Lockheed's encountered and whether your status as a significant government contractor is a help or a hindrance in managing and safeguarding your digital information assets.
We have a chief privacy officer who is in the legal department and a specialist. He interacts with all the businesses to protect our information assets in terms of privacy. In terms of cybersecurity, we have a well-recognized internal team that supports our internal assets from threats. We also work with our government customers to make sure we comply with all the provisions of their contracts.
So Maryanne, I have to ask you, how many people are in the legal department at Lockheed?
I know it's going to sound like it's a lot, but when we benchmarked, we are actually pretty lean with about 122 lawyers. To break that down, we have four business areas. Each business area has its own set of lawyers.
At corporate headquarters, we have lawyers who are specialists that don't necessarily flow down to the business area. For example, the business areas do not have a lawyer with a background in SEC filings.
Overall, our team of 386 includes not only the lawyers and admin professionals who support the departments, but also the paralegals who support the department and then a fair number of people in the export organization. Export experts are not just in corporate, but in each of the business areas.
It really goes back again to the value that Lockheed Martin places on fostering a culture of diversity and inclusion. The ability to draw from so many diverse perspectives and specialties has a positive impact on our workforce, our business and our bottom line.
Maryanne Lavan is the senior vice president, general counsel and corporate secretary for Lockheed Martin Corporation. She is responsible for the corporation’s legal affairs and law department, including serving as counsel to its senior leadership and board of directors.
Published September 7, 2018.
