Many of the roles in the corporate world have needed to evolve along with the other changes that have been rapidly occurring in the marketplace. In past decades, the CEO essentially served as the CEO's right-hand man. Today's general counsels are required to be the company's guardian as well as an instrumental part of the board's team. In good times and bad times, general counsels are also expected to be the company's spokesperson.
These days, it's less expected for general counsels to do mainly administrative tasks. Today's general counsels hold a prominent place in the corporate workplace. They serve in a direct advisory role to the board of directors. General counsels are also more widely recognized and are increasingly involved with investors. Modern governance practices require general counsels to use digital tools to streamline tasks while ensuring the best possible security. Board portals simplify the role of the general counsel because they provide a single secure space to communicate, share files and fulfill their duties.
The Evolution of the Role of General Counsel
The current role of the general counsel requires those individuals to find the right balance in being partner to the CEO and guardian to the company. General counsels must have a heightened awareness of ethical guidance and long-term management. New lawsuits have a great bearing on the role of the general counsel. There's been an increase in lawsuits and an increase in the means for financing lawsuits due to increasingly large verdicts.
The role of the general counsel extends inside and outside of the company. Inside the company, general counsels are as prominent as the CFO, because of the expectations of the business and society. General counsels are expected to provide advice beyond legal counsel to boards and CEOs. Within the scope of the general counsel role, attorneys are expected to give advice on regulation, investigations and ethical demands by non-governmental organizations (NGOs). From a global perspective, general counsels typically have a huge impact on a company's operations. General counsels also have a role to play outside of the company. In essence, the power has shifted from outside law firms to the internal legal department. In addition, general counsels are becoming an integral and public part of the leadership team.
General counsels of today assume dominant roles in legislation, regulation, public affairs and ethics, as well as offering board directors consultation and advice. The shift in the role and duties has helped some companies to control costs as they count on general counsels to provide regular consultations on strategy and risk. Outside corporate legal talent is increasingly moving to the corporate side. It's becoming more common for former US Attorneys General, SEC Enforcement Division Attorneys, federal judges and the senior partners of law firms to seek jobs as general counsels for corporations. The new range of duties requires general counsels to have a new range of issues to oversee. Today's general counsels need to restructure their relationships with high-priced law firms, bring more work in-house and establish temporary on-call legal services. Whereas the general counsel of the past may have been asked to oversee the preparation of acquisition agreements, today's corporate law departments are more likely to be brought in at earlier stages to assist in evaluating the decision about pursuing an acquisition.
The General Counsel Role and the Role of the BoardGovernance plays an increasing part in the role of the general counsel. The late Ben Heineman, a well-respected general counsel of General Electric, once said, "The General Counsel should ask not just whether something is legal, but whether it is right." What may seem to be blatantly legal may be unethical in general and may be proven as such in court, especially considering the vast changes that are taking place in the marketplace. To effectively serve the board and the executive team, general counsels must be proactive and take an offensive stance, rather than defend the board and the company on the back end when things have gone awry.
Why Board Portals Simplify the Role of the General Counsel
General counsels serve different roles and people within their position. They need to be effective attorneys who also serve as legal advisors and educators. The many new duties that they have require them to have stronger relationships with board directors and executives. Many of the discussions that they have via phone and electronic transmission are sensitive in nature and need to be held in the strictest confidence. This is an important reason for general counsels to use secure digital tools in their communications and collaborations.
Some of the most basic duties for all lawyers are to be able to identify potential legal trouble spots and to be able to persuade others to follow a certain course of action. A well-rounded general counsel who also has a reputation for being a forward-thinker is a real asset in the boardroom. One area in which it's crucial for boards to rely on legal expertise is the complex area of cybersecurity. There's little doubt that boards must give focused attention to this critical area. As the issue of cybersecurity becomes better known, general counsels will become increasingly involved in the handling of data breaches and subsequent litigation.
With so many duties before them, general counsels need to streamline routine tasks to free themselves up to deal with the most pressing issues.
Modern governance is the force that's driving today's governance practices. Modern governance is the practice of general counsels and other corporate leaders using tools and processes that give them the right information at the right time to empower better decision-making. Strong governance relies on secure communications, compliance and efficiency. With Diligent Boards and its secure electronic messaging system, general counsels can be sure that their internal and external communications will be shared in a completely private, secure space, where they are fully encrypted in transit and in storage. Communications have the full advantage of follow-up, as users can set up automatic reminders to ensure that nothing important falls through the cracks. Diligent Boards is the modern solution to board governance.