Building credibility with your board of directors
Linda Hoon - General Manager, Compliance, Operations & Planning & Corporate Affairs, GuocoLeisure Limited
You believe that the in-house legal function should not be a “back room function”. How can general counsel ensure their department is not regarded in this way?
How the legal department is perceived is very much dependent on the attitude and positioning of the chief legal officer. If they believe the legal department is a “back room” function, then that is how it will be perceived by the rest of the business.
I’ve always believed that the legal function can be a key strategic business partner – a deal maker, not a deal breaker. But there is no “quick fix” for changing perceptions. You must earn your stripes, and build a rapport with key employees. Ideally, a company’s general counsel should have the same status within a company as its chief financial officer.
For in-house counsel who are not also board members, how can they develop such a rapport?
If you hear that your company is considering a major new deal, the general counsel should offer to become part of the project team. There’s nothing wrong with a little humility, and asking to take part. Even if you don’t have much experience of strategic deal-making, numbers crunching or business modelling, it gives you a chance to make contribution to the company’s development in the early stages.
You should also try to get involved as early as possible. By overcoming any legal problem during the preliminary negotiations, you can avoid getting a reputation of being the person who says “no” when negotiations are already well advanced. Ideally, you should eventually get to the stage where the CEO automatically considers you a natural person to be in a deal team, working alongside the chief financial officer and business colleagues. Be plugged in.
The general counsel can also increase their profile with key directors by submitting regular “update reports” on material legal issues your department is working on. For large international companies with a disperse legal function, this can be a major project for the general counsel to organise.
Ideally, you should submit your update report to the company’s main board, but the audit or risk management committee are also useful targets. If you are persistent, the committee members will begin to take notice of your reports, and expect to see them on a regular basis. But don’t expect applause from day one – realistically, that’s not going to happen. As well as informing board members of the key legal issues that are facing the business, this approach demonstrates that you are passionate about what you do.
Does this approach have any implications for the type of in-house lawyers you recruit?
Not necessarily – if I’m looking for someone to process legal documents, or a technical expert, it’s not necessary for them to display significant signs of business acumen. If an individual has potential, their skills can be honed by on-the-job training.
Last updated -3 April 08