GCs falling short of board expectations
A new report reinforces the importance of law department leaders to be more involved strategically.
New findings reveal that 76 per cent of boards want their general counsel to take on a more strategic role, including planning and decision making, according to Corporate Board Member and BarkerGilmore. In reality, only 65 per cent of respondents say their general counsel fulfils this need.
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The Leveraging the GC: How the Right General Counsel Can Enhance Board Oversight report also highlights a discrepancy between the board’s desire for strategic support with the GC skill set they recruit for and value.
The report stated: “When board members were asked to rank the areas where the general counsel’s contributions are most valuable to directors, business strategy ranked the lowest, with only 1 per cent of the votes.”
Prioritising the top competencies for strategic general counsel members, the report’s leading attributes were high integrity (76 per cent), sound judgement (72 per cent), and effective communication (38 per cent). Financial acumen came in last at just 1 per cent.
Boards most appreciated GC insights on litigation (96 per cent), investigations/whistleblowers (89 per cent), and regulatory/legislative matters (84 per cent).
Corporate Board Member and BarkerGilmore added that these findings are “overwhelmingly skewed toward traditional legal counsel responsibilities”.
The report further noted that the recruitment criteria for a GC role is quite demanding, and rightly so, given the risks a GC is appointed to manage. It highlights that GCs who are found lacking in “judgement or ethics” can quickly see a job offer withdrawn.
Tension is still being felt around the recruitment process for general counsel members. There are questions about who should be involved in the final selection: “While 73 per cent of directors surveyed said they believe the board should be involved in the process, approximately half say it’s ultimately the CEO’s decision.”
The report also suggests that the board and the chief executive may not be in agreement about what they want from the GC: “Where board members prioritise corporate governance and ensuring fiduciary responsibility, the CEO places emphasis on a leader’s ability to serve as a strategic advisor, helping navigate risk across the enterprise while achieving business goals.”
Encouragingly, it seems that the onboarding process for GCs is progressing. Corporate Board Member and BarkerGilmore commented that onboarding a GC, previously the domain of the CEO, is now a responsibility being shared with board members.
The report concludes that there is a lot of scope for the GC role to expand in the future. Accepting that: “GCs are no longer the nay-sayers of the company,” the opportunities for future GCs look bright.