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Section 4 – The role of General Counsel and the Board
H O W G E N E R A L C O U N S E L A N D T H E B O A R D B E L I E V E G C s S P E N D T H E I R T I M E
I N C R E A S I N G A L I G NM E N T B E TWE E N B OA R D A N D G E N E R A L C O U N S E L
Both Boards and General Counsel agree that a major factor driving change in the role is dealing with specific legal and regulatory developments. Interestingly, this year General Counsel have identified factors impacting their role that aren’t as strongly recognised by the Board, particularly the need to deal with specific commercial risks that need to be managed. General Counsel identify stronger drivers for change, possibly because they experience these drivers on a day-to-day basis. Given the increasingly central role General Counsel are playing in organisations it is incumbent upon Boards to ensure they recognise and understand the pressures impacting their legal teams; and to give them the time, trust, authority and budget (for investment in training and technology) required to support secure and integrated growth. They need to provide adequate operational tools for General Counsel to make the strategic contribution that Board Directors and General Counsel are agreed is an important and growing part of the role.
Board Directors agree that the General Counsel role has an important strategic focus but there remains a difference in perception about how important the General Counsel role is in having an operational impact on the wider business. ‘Collaboration with other departments’ is considered an important part of the role by 91% of General Counsel and only 60% of Board Directors. Similarly ‘empowering the business through training and self- service tools’ is considered key by 77% of General Counsel and just 33% of Board Directors. General Counsel perceive pro-activity as a more important aspect of their function than is currently recognised by Boards. ‘Horizon scanning to pre-empt issues’ is considered an important part of the role by 91% of General Counsel and only 50% of Board Directors. ‘Proactively assessing the risk landscape is considered key by 77% of General Counsel and just 33% of Board Directors and ‘advising the business on ethical and moral risks’ is considered important by 72% of General Counsel and only 33% of Board Directors. In the wake of COVID-19 the importance of proactively assessing the risk landscape is likely to be top of mind for business leaders. Should the potential of a pandemic have been a bigger part of risk planning and could a more proactive approach have picked up the potential risks and have mitigated their impact? A re-evaluation of the strategic importance of the General Counsel role is likely, with a greater emphasis on both identifying risk and navigating the changes to the risk landscape that the pandemic has brought about.
P E R C E P T I O N S O F T H E R O L E
24 % 22 %
Responding to internal legal requests
For the past two years perceptions of the General Counsel role among Board Directors has become more closely aligned with General Counsel’s own perceptions of what they do. This trend has continued, and the Board’s recognition of the strategic contribution of General Counsel is increasing, to the extent that the Board perceive they spend 27% of their time working on strategic legal projects and 19% of their time working on strategic projects for the wider business. General Counsel are clearly further establishing their place at the leadership table. There is general agreement between Board and General Counsel about the most important parts of the General Counsel role, and the hierarchy of importance has been generally consistent over time. Both perceive ‘aligning the legal function to business strategy and context’ to be a key function of the role, and there is strong agreement that ‘being a trusted advisor to the executive, CEO and the Board’ is important.
22 % 19 %
Working on strategic projects for the wider business
15 % 24 %
Working on strategic legal projects
12 % 8%
People management
11 % 10 %
Department management, including management of processes and infrastructure
8% 16 %
Managing external counsel
7% 0%
Other
General Counsel Board
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