GENERAL COUNSEL HAS QUICKLY BECOME THE VIGILANT SENTINEL OF REPUTATION RISK AND THE CORPORATE CONSCIENCE
In September 2018, Danske Bank’s CEO resigned amid the swirl of whistleblower allegations of Russian interference in European economies and allegations of massive money laundering. In their account of that crisis in Raconteur Opinions, Veta Richardson and Leisbeth De Ridder contend the case was largely avoidable based on the findings of an internal review.
The authors concluded that the board of directors lacked an essential ally – the general counsel (GC). Sometime before the allegations surfaced, the GC ceased reporting to the CEO and began reporting to the chief financial officer. In 2014, in-house counsel sought to further investigate the whistleblower allegations, but two executives overruled him. A modern legal department, the authors contend, might have averted one of Europe’s biggest scandals.
A recent global study by the Association of Corporate Counsel (ACC) delivers a timely and fascinating footnote to the Danske event. The ACC concluded that GC who report directly to the CEO provide a leading indicator of their influence on critical corporate events and crises, while also illuminating a new mandate to create a culture that reinforces ethics and integrity driven by behaviour.
Indeed, the GC is becoming the most important C-suite executive on reputation, crisis and non-market risk, among other critical issues that have sparked a ‘constant crisis’ environment at many corporations with unprecedented operational uncertainty. As damaging issues increasingly erupt, from internal espionage and privacy invasions to consumer outrage and executive misconduct, the GC has become the crisis management quarterback with discernibly impressive impact, influence and positive results.
Apr-Jun 2019 Issue