CBRE's deputy chief ethics and compliance officer and former legal head for Asia, Sophia PK Yap, talks to Elizabeth Broomhall about juggling global regulators, family life and knee injuries

Sophia Pei-Kwun 'PK' Yap hobbles into her interview with Legal Week on crutches, nursing the leg injury she sustained in a Law Society relay race. Despite the discomfort – the torn ACL and meniscus recently required surgery – the deputy compliance chief for real estate giant CBRE is in a remarkably enthusiastic mood. "To me work is fun, it's not a chore," she exclaims from a meeting room in her company's Asian headquarters in Exchange Square. "I enjoy my career. Life is short; you have to enjoy what you're doing."

Yap – who was born in Singapore but educated in Australia – didn't start out in law, instead opting for a career in finance. In 1997, after three years in banking, she decided to make the move to Hong Kong to pursue what she now calls her "true passion". She began with a stint at Baker & McKenzie doing intellectual property work, and then China-focused commercial deals.

The shift to compliance work came later. Having moved from Bakers to work as the Asia-Pacific counsel for General Electric's (GE) healthcare business in 2003, Yap quickly found herself involved in anti-corruption programmes as well as lobbying the Chinese government to make the business landscape easier for foreign pharmaceutical companies. She explains how, being bound by international codes of practice, foreign multinationals such as GE were finding it difficult to compete with local companies which sometimes engaged in more culturally acceptable, 'customer friendly' practices.

"You can only go so far as to educate your business and tell them what's right and what's wrong, but the fact is that the playing field is not equal… educating and lobbying the government for positive change is the way to go," she argues. "You advise the government these are the gaps in laws and enforcement, and influence them. Would the local government or industries agree to industry guidelines or codes of practice? It's a tough political game."

At this point, compliance was sparking her interest as much as legal. The problem was finding time to juggle the role of being a mother and a senior lawyer at the same time. Looking for a balance, she did a brief stint in private equity, before making the move to CBRE in 2008.

"When I was working at GE I was probably flying 75% of the time, with two young children, so I decided to move to a less regional role and focus more on Greater China," says Yap. She soon found, however, that her dual-GC and senior vice-president role at private equity house LNS Partners meant she was spending even more time away from her family. "After about a year I accepted a great job offer at CBRE. I think it's been a good combination. CBRE is very people and family-oriented."

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Yap was tasked with growing the legal department in Asia from scratch. Earlier this year the department split into a 30-strong legal team spanning India, Australia, Singapore, China, Japan and Hong Kong, working  alongside a group of around 15 compliance professionals. Yap was made deputy chief ethics and compliance officer for the company globally. "Splitting the [teams] is a growing trend among Fortune 500 companies globally and is well regarded by the regulators," she opines.

In addition to the major jurisdictions, the company is also hiring compliance professionals in Vietnam and Thailand after completing an acquisition in Thailand earlier this year. When recruiting, Yap explains that it is crucial to find local expertise and to ensure candidates have a clear idea of how regional governments work.
"The strategy is to have local people with local language skills and local cultural appreciation and risk sensitivities in these countries to be effective advisers to the business," she says. "The aim is never to be over-centralised – you need people to be on the ground and understand the culture and risk factors. In larger countries where you may have local provincial government and central government, if you don't know how local bureaucracies work, you find that whatever strategy you have is not going to be very effective."

As for external lawyers, Yap says there is a tendency to also seek counsel from local partners, depending on the issue. Most of the work – which includes managing new client service contracts and requests for proposals, dealing with finance and HR matters, as well as ad hoc company acquisitions – is handled in-house, while specific or larger projects including anti-privacy, M&A and licence applications for capital raising are outsourced.

Among the firms used in the past include Clifford Chance, Squire Patton Boggs, Minter Ellison in Australia, WongPartnership in Singapore, Malaysian outfit Skrine, and Hadiputranto Hadinoto & Partners, Baker & McKenzie's affiliate firm in Jakarta. Akin to other global companies in Asia, CBRE has not yet felt a need for an Asia-Pacific panel, given the diversity of Asia's individual jurisdictions and the fast-paced changes occurring within local firms in the region.

Fighting corruption
The biggest task for the legal and compliance team currently is the execution of a new global anti-corruption programme, which is being led by Yap from Hong Kong. "It's not that certain types of people are more corrupt," she says. "It's just that some of these countries are developing, [and vulnerable to] low pay, social, cultural and political issues, inequality and lack of governance controls and enforcement. For companies operating in these countries, we need to be vigilant and we can't turn a blind eye or assume that someone else will take on the risk."

She adds that while real estate is not as regulated as sectors such as pharmaceuticals, energy and telecoms, there are some specific legal and compliance hurdles directly related to being a property company: "As we have different real estate client groups – including lenders, occupiers, investors and developers – the legal, compliance and operational risk varies. In administering the right programme for each of these business lines the risk profiles and mitigation plans need to be treated differently and customised – there is no one size fits all."

Yap's priority is to be proactive and avoid an investigation. She argues that many lawyers are often concerned with reacting to problems, rather than mitigating risk in the early stages. "We try our best to understand the changing risk profile of our business lines and tailor the programme to pre-empt these risks ahead of time," she explains. "I think an investigation is as bad as litigation. I would rather do the fine tuning ahead of time so you don't have to deal with terminations, loss of reputation and business."

According to Yap, what makes compliance an even bigger challenge is the pace at which modern business is carried out, which compels companies to frequently review internal strategies.

"With a compliance programme the job is never done because the world is continually evolving," she adds. "I believe it's a case of getting on the front foot and constantly revisiting what you've built up every three to five years to see how you can do better and remain ahead of the game. The world is changing, fraudsters are getting smarter in figuring out how to bypass systems and controls, the business world is getting more complex, industry is getting more advanced and risk profiles are changing. This means a programme you implemented 10 years ago may no longer be 100% effective today."

An additional complication for most GCs dealing with compliance, Yap argues, is that advice given by law firms is typically academic or theoretical, because of a lack of in-house experience among private practice lawyers, who are often inclined to focus on investigations work.

The CBRE lawyer also argues that the challenge stretches to board level, and that the GCs of global businesses – like their company leaders – are still struggling to account for the risks presented by corruption. "Multinationals that have yet to separately establish an ethics and compliance function are starting to see regulators and their clients demanding that the company establish that function and pay proper attention to compliance and ethics," she concludes. "Often, because of competing resources and politics, some companies fail to transform and establish that compliance and ethics department."

"They normally put it under legal because they think that's the closest function, but I hear from many GCs that they don't actually want it, that they don't really understand it and that it is frightening for them to oversee the newly created function and be made accountable if something bad happens.

"The type of compliance programmes that regulators expect companies to have are not offered as mainstream subjects in law school nor practised broadly in private practice, other than in big international law firms," says Yap. "It's something you learn and grow from hands-on experience."

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Career timeline
2014 – promoted to global deputy ethics and compliance officer for CBRE group
2008 – took role at CBRE as Asia-Pacific general counsel, tasked with building legal team from scratch
2007 – moved to LNS Partners as general counsel and senior vice president for private equity, Greater China
2003 – joined GE Healthcare, during which time she held three roles as Asia-Pacific legal counsel, Asia-Pacific technology counsel and finally Asia-Pacific senior counsel for compliance and litigation
1997 – moved to Hong Kong in pursuit of legal career; joined Baker & McKenzie in Hong Kong as a solicitor in its China commercial and IP practice
1996 – joined the commercial banking division of Adelaide Bank, Australia
1994-95 – worked in the consumer banking division of ANZ Bank, Australia