General Counsel and Chief Financial Officer Roles, Relationships Are Changing, CPAs Say
GCs and CFOs are taking on more operational and strategic roles, according to CPAs that work with both offices often. That shift has placed the two execs in "a very fluid, open ... closely coordinated role."
August 05, 2019 at 03:53 PM
3 minute read
The general counsel and chief financial officer roles and their relationships to each other may be changing.
Both are taking on more strategic and operational responsibilities, certified public accountants who regularly work with GCs and CFOs said. Todd Rahn, a CPA and senior managing director at FTI Consulting, said the roles’ “fundamental shift” from service provider to strategist is in part a “healthy byproduct of [the] stigma” that accounting and legal are cost centers.
“The general counsel and CFO are saying, ‘Hey, we can do that. Meaning I’m not just a cost center. I’m not just a ‘no’ person. I’m somebody who has a tremendously strong professional background, leadership skills. I’m in the C-suite for a reason,’” Rahn said.
He’s increasingly seeing human resources or facilities management report to GCs and CFOs. More are also handling investor communications, he said, and serving as the chief executive officer’s right-hand adviser on general business matters.
Greg Regan, a CPA and partner at Hemming Morse, said it’s crucial there isn’t “friction between those two offices.” In his experience, companies operate best when the “information exchange … causeway between the GC and CFO’s office that [is] opened without traffic.”
“It’s very important that they work very closely with each other. … In case it’s implied that there might be any type of competition, I don’t see that,” Rahn said. “I think in fact, the backgrounds are so distinct, they very much see each other as a really critical resource.”
Their mutual expansion into operations and business strategy have placed GCs and CFOs in “a very fluid, open … closely coordinated role, and that to me is a great step for both,” he added.
Last month, Ideaya Biosciences Inc. named its general counsel to its chief financial officer role. Blackboard Inc. made the same move in June, a sign the two roles have become more closely aligned. The CFO and GC of Boston-based Allied Minds became co-chief executive officers in July.
There are skills general counsel can bring into their collaborations with the CFO to push the business forward and help both execs in their often expanded new roles.
GCs can provide context for regulatory expectations, Regan said, and insight on industrywide best practices developed through their networks. Rahn noted GCs with “empathy,” a “proactive mindset” and a “rock-solid understanding of the business” are likely to have stronger relationships with their CFO.
General counsel can also help CFOs understand changing privacy rules as the CFO role becomes increasingly data-driven. Both CPAs, who are members of the California Society of Certified Public Accountants, said the California Consumer Privacy Act and future similar state privacy laws could lead to more collaboration between the execs.
“I think it’s deepened the relationship. CCPA is a very important change,” Regan said. “[It's] the tip of the spear. … It’s important for the GC’s office to educate the financial personnel and be able to implement appropriate internal controls.”
Read More:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllFinancial Watchdog Alleges Walmart Forced Army of Gig-Worker Drivers to Receive Pay Through High-Fee Accounts
GC Pleads Guilty to Embezzling $7.4 Million From 3 Banks
Trump Mulls Big Changes to Banking Regulation, Unsettling the Industry
Trending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250