Notes on The Economist’s 19th annual General Counsel Summit

Thomson Reuters was the lead sponsor of The Economist’s 19th annual General Counsel (GC) Summit, where risk, resilience and leadership were the headline topics for discussion. Here are my thoughts on the themes from across the day.

The convening power of the GC

Several panellists mentioned the ability of the GC to bring people together from across an organisation, with one referring to the GC as being the chief diplomat. This convening power is particularly important when responding to a crisis, and GCs have had ample opportunity to prove their worth due to a combination of Brexit, COVID-19 and the Russia-Ukraine conflict. The sanctions regime imposed following Russia’s invasion of Ukraine meant that many businesses had to close or curtail operations in Russia. GCs were required to spend time interpreting the sanctions and discussing their implications with the board. For further information, see Russia Sanctions and Related Considerations Toolkit.

Although a crisis can flare up quickly, it can take years to play out (for example, in the case of a data breach). Initially it’s important to keep calm and quickly convene a taskforce of experts (both internal and external) to find solutions and mitigations. The next step is to take decisive action and communicate those decisions throughout your organisation. For further information, see Practice note, Crisis management for in-house lawyers.

Team building: putting the person before the lawyer

Lawyers’ expectations have changed since the COVID-19 pandemic. Working from home has given them more control over their time and the environment in which they work. This level of control helps create a sense of identity and belonging that enables lawyers to perform at their best.

Although values can be conveyed via remote working, building a sense of belonging remotely is more difficult. Lawyers therefore need be given compelling reasons to come into the office. Fun is important, so don’t underestimate social occasions, such as a lunch or dinner. Other reasons for getting people back into the office include:

  • Sharing best practice.
  • Solving problems together via collaboration.
  • Meeting clients.
  • Learning and development opportunities.

It’s also helpful to get lawyers involved in goal setting and allow them to take control and connect their goals with the organisation’s purpose.

Working for an organisation that has a social purpose and lives its values is important, but GCs must remember that proper remuneration is necessary. Although in-house teams cannot compete with the salaries offered by law firms, or the defined career paths, there are other advantages. For example:

  • Better work-life balance.
  • The opportunity to gain experience via secondments into the business.
  • A relative lack of specialisation, which enables lawyers to develop skills in new areas.

Diversity, equity and inclusion (DEI) is now an important aspect of recruitment and retention. GCs can help improve DEI in the legal profession by recruiting into their teams at lower levels (for example, legal apprentices). For further information, see Practice note, Strategies for improving diversity, equity and inclusion in the legal industry.

Ethics: look for the silences, not just the noise

An unethical corporate culture can lead to bad behaviour and ultimately financial or reputational penalties. It’s important to create a culture of respect where challenge is welcomed if there are issues that need to be resolved (for example, by establishing effective speak-up channels).

GCs should be part of setting an organisation’s culture. This “tone from the top” must then be communicated throughout the organisation as your most isolated employees are your biggest risk. It also needs to trickle down to your suppliers as supply chain risk is now a key area of concern. Investors and customers are demanding more transparency, and regulation is on the increase too (for example, see Practice note, EU proposal for a Corporate Sustainability Due Diligence Directive).

Conducting site visits is vital as it will enable you to verify whether your suppliers are delivering what they originally promised. You cannot simply rely on desktop research. One panellist suggested creating a supplier code of conduct outlining what is expected of your suppliers. Key risks to focus on include:

  • Financial stability.
  • Bribery and corruption.
  • Environmental commitments.
  • Human rights.

For further information, see Supply chain compliance toolkit.

More than a cost centre: broadening the GC role

GCs are part of the senior leadership team and therefore must be about more than just driving down costs and doing more for less. One panellist referred to the GC as a businessperson with a legal background. GCs need to influence corporate strategy and be prepared to “stick their elbows out” and get involved in different parts of the business.
It’s important to define what value you provide to your organisation.

A panellist suggested creating a contract with your organisation outlining what Legal will deliver. Once you have an agreed message, cascade it down through your organisation and regularly repeat and reinforce it.

Horizon scanning, anticipating regulatory change and being compliant can all be value drivers as they put an organisation in a good position if the regulatory landscape changes and new markets open up.

Legal can leverage its technology for the wider benefit of an organisation. For example, contract analysis software proved its worth when assessing a company’s exposure to the Russia-Ukraine conflict.

Becoming a non-executive director (NED) in a different sector to the one in which your organisation operates can be useful. NED recruiters are becoming more open to candidates with a legal background. For further information, see Article, Non-executive directors: my journey to my first NED position.

Understanding financial fundamentals remains vital. Training by the finance team for Legal is useful and helps to build that key relationship with Finance. For further information, see Practice note, Working with the finance team.

Taking the lead on ESG

A GC benefits from having a helicopter view of their organisation, which enables them to spot a range of social issues and puts them in an excellent position to drive the ESG agenda forward. For example, by:

  • Advising the company on which social issues to speak up on.
  • Communicating the organisation’s climate change strategy.
  • Helping to establish the sustainability strategy at board level.
  • Creating and leading the ESG committee.

There is an evolving legal landscape with regulators in different jurisdictions learning from each other and co-operating on enforcement. As guardians of a company’s reputation, GCs need to be mindful of protecting their organisations from greenwashing.

Governance should become a cornerstone of business strategy and a business enabler. GCs need to highlight the value of good governance and the value that can be lost due to inadequate or non-existent controls. ESG can also be helpful when hiring and retaining talent as candidates are now asking about ESG and sustainability at interviews.

For further information, see Environmental, social and governance (ESG) toolkit: UK.

Cyber risks: honesty is the best policy

Cyber risks are constantly evolving. Phishing attacks are becoming increasingly sophisticated and are a particular challenge with a hybrid workforce. Ransomware attacks continue to be a threat and organisations are advised to get law enforcement involved in these situations. One panellist suggested that a “zero trust approach” should be taken with all communications.

Companies are being impacted by geopolitical events and attacks by hostile states are on the increase. It’s important to have a good understanding of the regulatory landscape and notify national authorities in the event of any attack. GCs need to agree a cyberattack response plan and stick to it. They should establish what happened and when, and the size of the breach (for example, the number of people impacted).

For further information, see Cybersecurity toolkit.

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