The increased risks around managing regulation have brought general counsels “to the table”, seeing them take the best position to lead assessments of critical changes.
A study by KPMG saw the onus for facilitating regulatory change shift to those behind the legal direction of a company. While the Hayne royal Ccmmission sharpened focus on conduct and regulation, general counsel stepped up to address the risks.
The report said: “It perhaps comes as no surprise that navigating increased regulation and managing interactions with the regulators charged with enforcing them is the most significant challenge facing today’s general counsel.
“The Hayne royal commission directed a bright light on not only how companies are behaving but also how they respond to regulatory scrutiny.”
A survey conducted by KPMG found regulation was the single largest risk facing many companies. There was a general increase in volume and complexity of regulation and it was identified as the greatest risk facing the corporate world over the next five years.
There was a broad consensus that general counsel are in the “best position to lead an assessment of potential impact of regulatory change”. These regulatory changes and the ascendency of principles based on legislative obligations have increasingly shone a light on why general counsel are best placed to manage change.
“The role lends itself to being able to advocate with the appropriate agency if needed to modify or stop the regulation proposed, while simultaneously bringing the facts, the impact, experts and financial costs to the organisation,” KPMG noted.
While it was commonplace for in-house lawyers to provide advice on critical regulatory changes, it wasn’t until recently they were invited into broader conversations. With this broader involvement, general counsels can frame the “ethical norms” in ensuring that the right behaviour has happened and continues to happen in the company.