What Role Does the General Counsel Play in Compliance?

Michael Nyhuis

The general counsel role can be a wide-ranging one, with a vast array of demands. These demands continue to grow as business operations grow more complex, scrutinized and heavily regulated.

Closely allied to the board and senior leadership, the general counsel may have responsibility for areas including risk management, legal affairs and regulatory adherence.

UK law firm Bevan Brittan, in an article highlighting challenges for the general counsel in the 2020s, cites governance, risk and compliance (GRC) obligations as key among these challenges:

Corporations are undoubtedly now facing compliance issues from a growing body of regulators across many different service sectors, markets and jurisdictions.
New laws on the environment, fraud, money laundering, trade, health, safety and intellectual property mean it can be challenging to keep up with regulatory requirements in all the areas and geographies where a company does business.
The role and remit of the general counsel can vary significantly from firm to firm, as recruitment firm Taylor Root notes:
In some firms, the general counsel might only have responsibility for legal risk, with a separate head of risk and compliance taking responsibility for operational risk and regulatory matters. In other firms, the head of risk and compliance might largely perform the same role as a general counsel in another firm.
The relationship between general counsel and chief compliance officer can also be fluid. An article at Corporate Compliance Insights observes:
Most public companies have given a senior employee the 'chief compliance officer' or some similar title and vested in him or her responsibility for the company's compliance and ethics programs. Not infrequently, the general counsel fills this role based on the premise that compliance is essentially a legal matter.

Defining the role of the general counsel in compliance is not straightforward. Their level of responsibility for regulatory compliance will differ depending on the organization's size and structure. What holds true across organizations is that general counsel is likely to have some accountability for governance, risk and compliance matters; something that brings a host of challenges.

Typical Compliance Issues Faced by General Counsels

When undertaking a compliance-focused role, there are several challenges facing the general counsel, including:
  • Overseeing regulatory compliance obligations, in many organizations, falls to the general counsel and is a significant duty. This responsibility can be challenging as externally imposed regulations change constantly. Additionally, internal policies and obligations are growing more complex as technologies advance. General counsels accountable for regulatory compliance face the uphill battle of keeping accurate and up-to-date records on libraries, statuses and expirations.
  • Reduced resources and budgets. Corporate and organizational budgets were already under pressure before the COVID-19 pandemic; now they are even more constrained. The challenge of doing more with less is far from unique to compliance or to general counsel, but the nature of regulatory compliance makes the need to meet obligations, despite budget challenges, non-negotiable.
  • Ensuring data transparency and accountability. The siloed structures of many organizations present a challenge to any general counsel responsible for compliance. Department-specific systems and requirements complicate data-gathering, making it difficult to obtain a clear picture of compliance, ownership and obscure compliance monitoring efforts.

How General Counsels Can Fulfil Their Compliance Obligations

There are numerous challenges for general counsel tasked with overseeing regulatory compliance. If you are in this position, getting your arms around the issues is a sensible first step — but this alone is not always straightforward.

The various systems mentioned above can hinder general counsels seeking a comprehensive overview of compliance obligations and performance. This is compounded when manual data-gathering approaches reduce consistency and visibility.

No surprise that organizations are increasingly turning to compliance software to provide a "single source of truth" around regulatory compliance requirements. Best-in-class compliance software can address many challenges we've outlined including:

  • Improve risk management; corrective actions and improvements to processes identified via comprehensive risk assessments
  • Boost effectiveness and efficiency through robust and connected performance data and KPIs
  • Provide real-time ability to analyze compliance obligations and measure compliance standards
  • Guarantee evidence of compliance is easily collated and recorded, so that the organization is always audit-ready

Learn More About the Benefits of Compliance Software

With the increasing volume and complexity of regulations, and as the penalties for getting it wrong are significant, general counsels are recognizing the benefits of using software to increase transparency and robustness of their compliance programs.

A good compliance solution will enable you to take a data-driven approach, providing assurance your organization has the right actions in place. Leverage the best practice standards and frameworks; creating bespoke policies and compliance monitoring programs based on organizational requirements, and measuring compliance performance to identify gaps will ensure constant improvement.

If compliance solutions are something your general counsel, compliance officers and organization could benefit from, you can learn more within our Diligent Compliance solutions page.

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Michael Nyhuis
Michael Nyhuis is the former Director of Audit & Compliance at Diligent and a modern governance expert with over 25 years of experience.