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The New York Stock Exchanges Governance Services publication, Corporate Board Member, and executive recruitment agency BarkerGilmore, conducted a study to examine the role of general counsel in the boardroom. The study, entitled "GCs in the Boardroom and Beyond," (free download with registration) surveyed 275 directors and CEOs from Corporate Board Member's database.
The results? They are in line with the overall trend of the evolving role of general counsel, and there is recognition that general counsel have more to contribute than just being the fearless leader of the law department.
The increase in the number of general counsel with a seat at the table in the boardroom is quite astonishing. Ten years ago, 55.5% of companies had their general counsel also on the board. Now, that figure is up to 86%, with only 14% of companies surveyed not putting their GC on the board.
Though not all CEOs and directors agree on every aspect of the value general counsel add to the boardroom, there are definitely areas that stand apart from the rest when it comes to the value GCs add to the board.
1. Sounding Board
First and foremost, the study found that "the GC is primarily valued ... as a sounding board." Namely, acting as the "counselor in chief" to the CEO, and providing "sound judgment on governance and legal matters" remains the most important role for GC on boards.
2. Compliance and Governance
Another area where there is overwhelming agreement, understandably so, is in the area of corporate compliance, governance and ethics. As this is already something in the GCs responsibility, it makes sense that they would be valued for these efforts on the board.
3. Risk Assessment
General counsel's understanding and ability to asses risk is highly valued on corporate boards, and her ability to advise on risk management is appreciated.
4. Business Strategy
Finally, general counsel are expected to have an understanding of the industry and company's business, and their opinion in this area is increasingly sought.
As general counsel's roles and responsibilities evolve to encompass more and more business aspects, it's only natural that we will see an upward trend on the number of GCs sitting on boards. Soon, it may just be a standard thing -- never say never.
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