Ironically, the more that a GC understands the business, the more respected she is as a lawyer.
DR: Krispy Kreme has had some SEC issues in the past. What advice would you give to other GC in dealing with SEC issues?
DM: Practice patience. I've worked on more government investigations than I can count. Krispy Kreme's SEC investigation took five years to resolve. Your clients will become frustrated at the slow pace, so keep them well informed, even if it means saying that you are waiting on the SEC to get back to you.
A long investigation gives you time, though, to build up credibility with the investigators and some mutual respect. Those are valuable commodities when you are at the table hammering out the final documents to resolve the matter.
DR: The company also has had some executive upheaval. What is the best advice you can give in dealing with a board wanting change, especially when it deals with your boss?
DM: Again, approaching the board with the attitude of an outside lawyer—it's the only lawyer I know how to be—is key. The CEO is my boss, but he is not my client—the company is. Calling things straight down the middle, while knowing that your advice could be disregarded or that you could be dismissed, is what the company deserves. Shading advice to appeal to what you think the board wants to hear is really a road to disaster for a GC.
DR: Your background is in litigation. What is your overall philosophy on litigation?
DM: Prepare to try cases. You will get the best outcomes if you are prepared to litigate, appeal, and appeal again. That best outcome might be a settlement, but a settlement driven by the will to litigate is going to be a smart, well-informed settlement. I am not a fan of arbitration, except in international contexts. I don't think that it saves time or money.
DR: Your department recently was honored with several awards by Corporate Secretary magazine, including most innovative CSR disclosure policy. Tell us about your innovative CSR [corporate social responsibility] disclosure policy. What are the advantages?
DM: Actually, we won Corporate Secretary magazine's 2012 Best Corporate Governance Team Award. We were really proud of that because it shows how far the company has come since the SEC investigation. We put in best-practice governance policies and our board and CEO set the right tone from the top. It was quite an achievement to be nationally recognized.
DR: You also were a finalist in the "Best Use of Technology" award. What was that for and how does it benefits your department.
DM: We were nominated for Best Use of Technology, but didn't win, which is OK. We made some progress, but I would not say that we were unique. Notably, we moved to an online board portal this year. It provides us an easy way for directors to view all board materials, even historic ones, from their iPads. It also enhanced the security of our communications.
DR: What is your biggest frustration in franchise law? How would you change it?
DM: Countries, particularly in Asia, are adopting franchise registration and disclosure regimes. In theory, it's a fine idea. But in practice, they are about 50 years behind the West in terms of striking the right balance between protecting franchisees and allowing franchisors to efficiently conduct business without undue red tape.
China and South Korea have two good examples of franchise regulations that need to evolve away from legal formalism toward more business-minded schemes. In South Korea for example, a franchisor is required to provide lengthy disclosures in Korean, even to a franchisee with whom it has done business for 10 years or more. They'll catch up, but not in my lifetime.
This article originally appeared in the Daily Report.
