More than half of directors and executives polled say legal chiefs could add more value on business strategy
New research underlines the extent to which directors and executives are looking for general counsel – who also often wear the corporate secretary hat – to play an increasingly strategic role.
According to a report from NYSE Governance Services and search firm BarkerGilmore, more than half (53 percent) of almost 300 directors and C-suite executives polled this February point to business strategy as an area where general counsel could add more value. Second on that list, picked by one third of respondents, is enterprise risk management, followed by M&A (25 percent), global growth and operations (19 percent) and industry knowledge (19 percent).
Less surprisingly, corporate governance (69 percent) and compliance/ethics (67 percent) are the areas where general counsel are said to be having the greatest impact on the business. But only 6 percent of the respondents point to shareholder engagement – an area of growing focus for boards.
‘Elevated expectations caused by an increasingly complex and litigious environment have already compelled several [general counsel] to broaden their horizons and take an enterprising stance in the corporate and strategic planning process,’ the authors of the report write. ‘Our survey shows there nevertheless remains a notable number of board members and C-suite officers waiting for their legal chiefs to up their contribution to company goals.’
HIGH MARKS
On the whole, general counsel score high marks among their chief clients. For example, 60 percent of respondents say they are extremely satisfied with their top attorneys’ ability to deliver on promises and management of the legal department. Fifty-five percent are very happy with the effectiveness of general counsel communications, 54 percent give the same rating for their knowledge of the business.
At the other end of the range, 33 percent of respondents are extremely satisfied with their general counsel’s strategic thinking, while 20 percent say it needs improvement. Sixteen percent say the legal chief’s financial acumen needs improving.
The survey also looks at the ingredients directors and executives think general counsel need to be considered a valuable, strategic adviser to the board. Most commonly cited is legal expertise (66 percent of respondents), followed by sound judgment (49 percent), business acumen (34 percent), high integrity (33 percent) and strategic perspective (32 percent).
Bob Barker, managing partner at BarkerGilmore, says good business strategies involve managing, not avoiding, risk, meaning that general counsel can make a substantial contribution by identifying and steering the executive team through the risks involved in the strategy.
In addition, the survey suggests succession planning may be an issue: more than half (54 percent) of respondents have not yet identified a successor to their firm’s general counsel, and 55 percent say their company does not have a formal succession plan for the position.
‘With law department budgets running so lean, it is uncommon for a clear [general counsel] successor to be identified and closely aligned with the board, especially at small or mid-sized companies,’ BarkerGilmore managing partner John Gilmore says.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
