CEOs Want General Counsel 'More Strategically Involved' in Leadership Roles
Seventy percent of chief executives surveyed said that an ideal general counsel should serve as both a strategic business partner at the company and as an important member of its leadership team, but only 55% of those CEOs said that their current GC fills those roles.
June 03, 2020 at 10:44 AM
4 minute read
Many chief executives at U.S. companies want their general counsel to be "more strategically involved" in the business decisions and leadership of their companies, according to a newly released survey of more than 100 public and private corporate CEOs.
And while the trend of placing GCs in senior executive and leadership roles at corporations has been growing, especially at public companies, the majority of CEOs say they want more from the GCs, according to the survey conducted by Chief Executive Group, a media and peer networks-oriented group for CEOs, and BarkerGilmore, an executive search firm.
To that point, 70% of chief executives surveyed said an ideal GC should serve as both a strategic business partner at the company and as an important member of its leadership team, but only 55% of those CEOs said that their current GC fills those roles, according to a news release and a 14-page report about the survey.
Moreover, only 8% of the CEOs indicated that their ideal GC would act only as a legal counselor and manager of legal risk, reported Chief Executive Group and BarkerGilmore, which works with corporations to recruit legal and compliance executives.
CEOs also "shared that their General Counsel add the most value by offering risk analysis expertise and acting as their adviser," according to a BarkerGilmore news release issued Tuesday about the survey.
"At both public and private companies, CEOs believe the top three ways General Counsel make the greatest impact to their teams are litigation/investigation management, risk management, and crisis management," BarkerGilmore added.
Another survey finding was that 84% of public company CEOs who responded have their GCs on their company's executive management team. But only 57% of private company CEOs surveyed do.
"The role of the general counsel has evolved significantly over the past decades, from a pure legal risk management function in the 1980s to that of adviser to the CEO—and board—on many aspects of the strategy through the 2000s and 2010s," the report on the survey, which was conducted in February 2020, said.
"If it hadn't been proven before, the argument for this evolution has undoubtedly been brought into evidence in recent years, when the constant state of disruption and a slew of corporate scandals have further exposed the critical importance of the GC at the executive table," the report continued.
It added that "just four years ago, in a 2016 survey conducted by Corporate Board Member (then NYSE Governance Services) and BarkerGilmore, 97 percent of public company directors said they expected their GC to be an integral part of the senior executive team by 2020—up from 81 percent who already were 10 years prior." And then it said, "When polled in early 2020, 96 percent of public company CEOs confirmed this had, indeed, become the new reality."
But, the report said, private companies "continue to lag," with only 57% of CEOs saying their GC was a senior executive team member. And it noted that private-company GCs are "typically entrusted with more corporate administrative duties than strategic advisory roles," and some "choose to only retain legal counsel as needed and have made a strategic decision to keep the function external."
"Yet, the majority of CEOs in our study say the role the GC plays in providing early legal input into the strategy and its translation into operations is critical regardless of size. In fact, possibly even more so with smaller, more fragile companies that must have a robust risk mitigation strategy," the report said.
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