Given the wide-ranging impacts of geopolitical change over the past few years, it’s more evident than ever that regardless of the strength of a product or service, no business is immune from uncertainty and challenges. Political and societal changes affect the business environment, the mindset of consumers, the hiring patterns of employees, and the behavior of investors.
Within this shifting landscape, we also witness that companies have responded by strengthening their own values at a time when societal values around them may be in flux. The leading corporations today establish and fulfill a sense of purpose. They have an understanding for how their decisions impact society at large and a desire to impact it for the better.
Intrinsically tied to purpose are corporate culture and a “tone from the top” related to ethics, compliance, and values. As the department ultimately responsible for compliance, the corporate legal department has a unique ability to drive purpose. In Leveraging Legal Leadership: The General Counsel as Corporate Culture Influencer, an Association of Corporate Counsel (ACC) publication selected for the National Association of Corporate Directors 2017 Blue Ribbon Commission Report on Culture as a Corporate Asset, ACC makes the case for a strong law department in order to further company-wide ethical practices.
Indeed, it is in the law department’s best interest that the company have a strong purpose. This means an engaged board and investors, strong ties to the community, better than average employee relations, and a long-term approach that prioritizes ethical best practices over short term gains. This, in turn, means fewer legal missteps.
And for companies seeking strong purpose woven through all facets of the business, a strong law department can facilitate this reality. Such a law department will have a vocal, well-respected chief legal officer or general counsel (GC), someone who reports directly to the CEO, regularly attends board meetings, and is a fixture at the executive table when important discussions are underway. As the company’s lead lawyer, the GC has company ethics as the ultimate priority and can ensure that ethics – and therefore purpose – are at the heart of all discussions and decisions.
Research of the in-house counsel community indicates that for corporate counsel, a sense of mission drives their job satisfaction. An overwhelming 90 percent feel that their work contributes to the overall mission (a statistic that reaches as high as 96 percent when isolating not-for-profit industry respondents), per the 2017 ACC Global Trends Report. These corporate lawyers see a strong correlation between their legal duties and advancing purpose.
Here are concrete steps for in-house counsel seeking to further the ties between the law department’s actions and the company’s mission and broader societal purpose:
Advocate for a GC with Strong Reporting Lines, Access
As the person ultimately responsible for corporate compliance and ethics, it’s crucial that the GC have access to the CEO and the board of directors. Specifically, ACC recommends that the GC report directly to the CEO and regularly attend all board meetings. This ensures that a commitment to ethics and compliance is at the forefront of executive and boardroom conversations.
ACC research indicates that a GC who reports to the CEO is more likely to be involved in strategic conversations; thus, ethics and compliance are woven into initial strategy, not touched upon later as afterthoughts. Per ACC’s report, “In addition to providing the legal department with requisite influence, having the general counsel report to the CEO is an important part of setting the ‘tone at the top.’ When legal has a seat at the table, it sends a message to the rest of the company that compliance with laws and regulations is a company priority. It also says something about the CEO: that input from legal is valued, and that the CEO’s vision for the company prioritizes ethics and integrity.”
Promote the Independence of the GC, Law Department
In-house lawyers seeking to further corporate purpose can promote the independence of the GC – and the entire law department – in all instances. It’s important for colleagues from other business units to understand the role of the law department and the loyalty of in-house counsel. This seems like a simple premise, but is often overlooked. An in-house lawyer’s client is the company – not any particular employee (i.e., the CEO). If colleagues understand this independence and the reason it’s a priority, they’ll better understand that the advice from the law department advances the best interests of the corporation and its purpose.
In this vein, in-house lawyers should be vocal when they feel decisions are not in the best interests of the company’s ethics or purpose. In meetings, in-house counsel should feel free to remind fellow colleagues that what’s best for the enterprise transcends what is best for any particular individual, department, etc. This is corporate purpose at its core – tying corporate actions to something bigger.
Look for Ways to Advise on Issues Beyond the Legal Box
A review of the titles of most Fortune 500 GCs may hint at other responsibilities beyond legal: government affairs, communications, public policy, administration, and so on. The broadening of the GC role represents the acknowledgement that the lead lawyer can – and should – advise beyond the legal box.
Given the complexity of global markets, the increasing regulatory environment, and shifting political landscape, there is almost no business decision today that does not have a legal or compliance component. GCs should be involved in business strategy and can use their business acumen to advise on a variety of issues. In-house lawyers should feel similarly empowered beyond the GC role to use their unique perspective to help the company advance on a variety of issues. Ultimately, this legal and compliance-focused perspective will drive the company closer to its set purpose.
Seek connections with other business units
Similar to advising on issues beyond legal, in-house lawyers should look to build close relationships with non-legal colleagues. This will open new doors to lend advice on key decisions where the in-house counsel can infuse an ethics and compliance mindset to corporate plans. With this dual eye on legal constraints and business opportunities, the legal team can ensure that discussions flow towards a conclusion that fits the corporate purpose.
Ultimately, companies with a high regard for compliance and ethics are typically the same companies that have a well-established purpose. As businesses take a renewed interest in practices that benefit the local and global communities, a strong law department is uniquely positioned to help the company ensure that it has the right “tone from the top” as it advances its mission and purpose for the greater good.
About the Author:
Christopher Murphy Ives is VP, Legal Department Chief of Staff and Deputy General Counsel, Global Sales, EMEA & Americas at Hewlett Packard Enterprise, recently relocated to Mississauga, Canada from Switzerland. He is president of ACC Europe, the leading in-house counsel association in Europe and part of the global Association of Corporate Counsel, with more than 43,000 members in 85 countries.