LEGA L’ S KE Y RO LE IN M ANAG IN G RI S K A N D S H A PIN G STR ATEGY CHIEF LEGAL OFFICER & CHIEF RISK & COMPLIANCE OFFICER W I T H S P EC I A L T H A N K S TO M A R K S T R OYA N , PA R T N E R AT M A N C H E S T E R S Q UA R E PA R T N E R S; A N D E D P E P P I AT T, G E N E R A L CO U N S E L A N D CO M PA N Y S EC R E TA RY, D E L A R U E .
R E G U L AT I O N , T H E C H I E F CONCERN FOR BUSINESS
LE G A L- O R I E N T E D S T R AT E GY
General counsels have historically advised on the strategic implications of legal affairs, and have overseen how an organisation’s strategy is reflected in its legal department. Today, CLOs are being brought to the table to help to shape and drive strategy in the first place. Not only is risk at the heart of the strategic agenda, but the associated wisdom built into the experience of a CLO is of striking value for organisations as they look ahead. With pressure from multiple groups of stakeholders increasing, governance is rising to the top of business leaders’ agendas. Impeccable ethical standards are more critical than ever when running a business. Under the close watch of investors, regulators and the media, companies’ reputations are constantly at stake. Legal teams are expanding from a position of simply informing strategic decisions on regulatory matters, to helping to design corporate strategies that address the pressures organisations face. To establish themselves as drivers of strategies, CLOs must: R E P O R T D I R E C TLY TO TH E C E O , to have a direct and trusted line to power; CO NTR O L TH E LE GA L TE A M ’ S B U D G E T , encompassing pay, bonuses and external spend, in order to establish and drive strategic priorities in the team; E S TA B LI S H A C LE A R O P E R ATI N G M O D E L , with metrics connected to the goals of the business, building a department that outperforms the competition; and H AV E B R OA D ACC E S S TO G OV E R N A N C E CO M M IT TE E S , being one of the best-informed leaders in the C-Suite.
Regulation is at the top of business leaders’ agendas. Regulatory change was listed as the number one concern across the C-Suite in Winmark’s latest member survey, ahead of Brexit, the economic outlook, and technology and automation. CLOs and their legal departments are becoming one of the most valuable resources for CEOs and the board. Regulation has the potential to have an enormous impact on business. It brings outstanding challenges and opportunities, making CLOs’ perspective vital for effective decision-making. Unprecedented uncertainty has turned risk management into a core strategic capability, and CLOs’ regulatory expertise, risk management skills and ability to judge the relevance and significance of different scenarios puts them in a unique position to advise CEOs and boards.
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TH E RO LE O F TH E CH I E F LEGA L O FFI CE R Positioning
Role positioning
Core skills/competencies
Core tasks
Corporate leadership
Business leader and legal counsel (think like a CEO)
Diversity of thinking (in boardroom) and constructive challenge Networking with directors (across global footprint) Good legal advice and judgement Influencing skills
Independent thought Company director and secretariat (UK and international subsidiary boards) Staying on top of key legal knowledge at corporate, sector, product (innovation and liability) and supply-chain levels
Strategic direction and operating model
Strategy consultant
Business design and wireframing Legal strategy Financial analysis Commercial acumen
Environmental/horizon scanning Legal compliance (international) Corporate alignment Find and deliver optimal economic model Optimise linkages with procurement, IP, HR etc
Reporting, stakeholders and customers
Trusted business adviser and partner
Business outcome-focused Governance Managing conflict Data analytics, privacy and security Filtering, identifying and communicating salient issues
Governance review Policy creation and execution Budget and financial management Legal head in times of crisis Educating the business
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