A new survey of public company board members conducted by Corporate Board Member and BarkerGilmore found that 76% of directors prefer their general counsel to voice opinions on business strategy and actively participate in strategic planning.
According to the survey, providing information on legal issues and risks is not enough.
“Leveraging the GC: How the Right General Counsel Can Improve Board Oversight” is an update of a similar survey conducted in 2016. This year’s iteration garnered 226 responses from US board members and was conducted in January.
Larger organizations are even more dependent on business insights from GC, with 87% of directors at companies with a market capitalization of more than $10 billion saying they have sought strategic advice from their general counsel.
“The GC these days needs to be much more than a lawyer,” said a confidential respondent. “They have to function as the backbone of the organization.”
However, the report identified a disconnect between what administrators say they want and how they actually use a lawyer. According to the report, three areas of information were particularly valued by administrators: litigation, whistleblower investigations and regulatory matters.
More than 80% of respondents identified one of these traditional legal counsel responsibilities as the most important on which CGs should advise. Currently hot issues, such as ESG, data privacy and COVID-related mandates, were all ranked at 50% or less in value.
More bizarrely, only 1% of directors said they currently rank GC advice on business strategy among their top three most helpful contributions.
“Companies naturally require rigid legal requirements for their general counsel,” the report explains. “In highly regulated industries, applicants may even be required to have hands-on experience.”
To close this gap, boards may need to take a hands-on approach to hiring. The report notes that CEOs have long been at the forefront when it comes to adding top legal counsel.
As directors participate in the search for talent, they can better convey their expectations to candidates, the report says.
“In many ways, the General Counsel is the most important interface, other than the CEO, that board members have,” another anonymous respondent wrote in the report. “Board members should have a say in this personnel decision.”