A General Counsel has traditionally played a singular role as legal advisor to the CEO and the board. But in today’s complex and fast-moving business world, more GCs are expanding their purview and impact, embracing the role of Strategic Advisor.
These expanded GC competencies are something many corporate board members welcome. A 2022 survey of public company board members conducted by Corporate Board Member and BarkerGilmore has found 76 percent of directors prefer their general counsel to express views on business strategy and actively participate in strategic planning.
For GCs, the additional responsibilities are a good fit as good General Counsels are strategic as part of their daily work. They make sense of complex data, trends and dynamics and understand and anticipate the potential impact these may have on the business. They use their analysis to shape the direction of the business, usually in collaboration with executive leaders.
So how can they best serve as strategic advisors to a corporate board? We have identified four areas where the General Counsel can play an important strategic role.
Give input to board-level strategic decision-making.
There are many strategic issues in which a GC can have important input. Many consult a General Counsel when dealing with a cybersecurity issue or an important M&A topic. In areas regarding ESG, the advice of the General Counsel may be helpful since ESG can have a risk and compliance aspect. The General Counsel may also provide useful insights on high-profile political issues. Consider, as an example, the pressure Disney faced during the “Don’t Say Gay” legislative debate. The decision to weigh in on that issue was a board-level decision. Their initial tepid response caused a backlash. That spurred a follow-up response that argued against the bill and resulted in the state of Florida removing the special tax preference Disney enjoyed as a property owner in the state. A GC, with the ear of the CEO and the confidence of the board, can play a role in these fraught moments by providing a bridge between the C-suite and the board.
Ensure effective board governance
General Counsels have a role to play in guiding the board to focus their valuable and limited time. A GC should ask: How have I transformed the governance process to enable more strategic, substantive conversations in meetings? The GC can control strategic use of the calendar and agenda to free up time in plenary to focus on key strategic issues and take mundane items into committee. The GC can also track key decisions and stay on top of those items to ensure follow up. The GC may also be skilled at understanding and effectively communicating the history of board decision-making in similar or related circumstances. GCs can also help the board think about how to apply that learning and history to current decisions.
Facilitate strategic board and CEO hires
General Counsels are often involved in director recruitment and succession planning as part of the Corporate Secretary role. Often, their emphasis in on process management. But there is an opportunity for GCs to have a strategic impact. For example, a board must often make decisions in the recruitment of independent directors or a CEO search on whether to seek specialists in a topic or generalists who have seen a breadth of issues. There is no correct answer this this philosophy question. The choice between a specialist and a generalist board philosophy is often driven by how much trust the board puts in management and committees to bring the expertise needed to the discussion. The General Counsel can facilitate that discussion, voicing in the board’s previous experiences with handling key strategic issues, where that excelled and where it fell short, and assessing likely future challenges and the stakes at issue.
Improve board performance.
General Counsels can facilitate the board’s ability to work effectively as a group in making strategic contributions. One way is to ensure that regular board effectiveness reviews are not a box-checking exercise, but are perceived and designed to result in improved board performance. Many board evaluations focus on the process aspects, which is understandable given the importance of process management in board governance. But GCs can ensure that there is equal focus on evaluating board member behaviors. The combination of the two components leads to better strategic discussion and, ultimately, better decisions.
GCs must be proactive and make these expanded efforts part of their strategic agenda for board advising. Some of the best General Counsels are already doing this and not waiting for boards to recognize the strategic value they can provide. These executives are also building experiences and potential references that will be very beneficial when pursuing their own board service opportunities in the future.