While a general counsel may have its merits, there are also certain perils that cannot be denied. Due to the sheer number of scandals that have erupted in recent years involving white-collar crime and insider trading, combined with the stresses associated with the economic crisis, the role of the corporate regulations has significantly expanded. The general council serves as a supervisor of sorts to ensure corporate compliance and governance. Consequently, it has become vital to analyse the methods associated with the expansion of the general council’s role.
The Modern Role of General Counsel — An Introduction and Background
In order to do that, we must first examine the background associated with the general counsel’s role, which traditionally is to advise corporate boards of directors regarding their oversight responsibilities. The goal of such oversight is to ensure the best interest of the company as well as its stakeholders. GCs are also responsible for handling a tremendous assortment of other duties, such as legal cost management, corporate transactions that tend to be highly complex, and even ensuring the corporation is in compliance with both federal and state regulations.
When the general council also serves as the chief legal officer for a corporation, he or she is responsible for providing the board of directors with legal advice. This, naturally, can lead to conflicts in which the GC could very well be at risk for being terminated should he or she provide information or counsel that is not what the board wishes to hear.
The Pressures and Priorities Propelling the Actions of General Counsel
In survey responses, general counsel tends to identify similar operational and business priorities. Most such priorities can be tied directly to risk management, cost control, and operational efficiency. At the same time, GCs tend to face a number of significant pressures, including an increasing regulatory environment and compliance challenges. Additionally, GCs must also cope with concerns related to data privacy and data security. Consequently, GCs must operate in a rapidly evolving world of global change. In light of such increasingly competitive pressures, what GCs want and need tends to be driven by the need to keep costs under control while at the same time working to boost productivity and efficiency.
Working in a World of Increasing Complexity
Ultimately, the goal of general counsel is to determine both the strengths as well as the vulnerabilities of a company while simultaneously preventing critical issues before they actually occur. In the past few years, the role of GCs has grown extensively to encompass a broad array of other areas, including compliance, regulation, risk, and HR. As a result, general counsel must now work in a world of ever-increasing complexity. As companies and organisations continue to become more and more complex, GCs have found it necessary to significantly expand their expertise in an effort to simply keep up with the changes surrounding them.
The Debate — Who Are the Owners of Enterprise Risk?
Given the increasing amount of risk faced by organisations today, the question of who is the actual owner of such risk must be posed. The amount of risk faced by companies today cannot be denied. A variety of reasons can lead to the sudden cessation of operation, including rogue employees, geopolitical events, and more. Regardless of what the risk may be, it tends to possess some legal aspect. Regardless of who actually owns the risk, the fact is that GCs are responsible for responding to emergencies as they occur. This often results in a firefighter approach in which GCs attempt to forestall crises.
Where Does Regulatory Compliance Fit in?
Coping with risk in today’s compliance landscape tends to require GCs to stay ahead of problems while at the same time playing catch up. This is largely due to the fact that GCs may not know from where their next compliance issue will stem. It is not uncommon for regulations to be exported from one area to another.
The Cyber Challenge
While GCs face a number of significant challenges, among the most significant is that of cybersecurity. Although the topic of cybersecurity might at first appear to be far too technical of a problem for GCs to worry about, the fact remains that the consequences of data privacy are so significant that it should be a concern for the entire company. With a growing global workforce, particularly with an increasing number of people now working from home, the subject of cybersecurity is one that has grown to epic proportions. Consequently, it has become necessary for GCs to be present anytime cybersecurity issues are addressed and in all necessary preparations to improve data security.
Moving forward, GCs must play a vital role in helping their organisations remain both legally and ethically compliant while simultaneously providing necessary legal advice regarding the best strategy for approaching risk.