The GC: The Truth Can Be Adjusted...

If you are a General Counsel (GC) today for an organization doing business on a global basis, your Blackberry must be "buzzing" every few minutes. The legal risk being encountered will always be a factor of the number of deals, the number of employees and the growing number of countries you do business in.

As a corporate GC of a global enterprise, you have a fiduciary responsibility to protect the enterprise from adversaries such as the rogue employee, the government regulator, competitors and plaintiff class actions. The Rule of Law in your organization is in your hands. How you transfer the "Talking Points" on ethics and legal messages to your employees, partners, suppliers and adversaries is critical. The effectiveness of your relationship with internal CSO, CISO and Internal Audit leadership could mean the survival of the company and your job.

In the latest hollywood movie Michael Clayton with George Clooney, he plays the role of a prominent law firm's "Fixer." He finds himself taking care of the messes corporate clients put themselves into and even the internal firm problems with senior litigators who have decided to do secret battle with a prominent clients General Counsel. The GC in this film takes every precaution to ensure the settlement of a pending class action suit that has achieved over +30,000 billable hours by Michael Clayton's law firm.

While this fictitious story displays the extremes of the world many GC's live in with their outside counsel, it sets the stage for gaining insight into the legal ethics and corporate challenges global institutions face on a continuous basis. The Yin / Yang of corporate compliance and governance is consistently wrestling with the pressure to save people from losing their reputations and the longing to do the right thing. The goal is to achieve a defensible standard of care and to have peace of mind. To be able to stand behind the fiduciary duty to uphold the law and enforce the rule of law in corporate business.

When was the last time a GC took the "Ethics" and "Rule of Law" program directly to the employees in face to face sessions? To give the employees, partners or suppliers first hand opportunity to meet, greet and engage with the General Counsel of the enterprise. By doing this you are directly engaging with the people on the front line to be the "eyes and ears" for the company. To be that early warning system of potential conflicts of interest, fraud and corruption. As an example, Scott Chaplin at Stanley Associates says this:

"I deal with a wide range of issues on any given day. I support not only our business operations but also corporate support. Our recurring issues include corporate governance and securities, and we're active in the mergers and acquisitions area -- we've done several deals recently. I handle labor and employment issues on a daily basis, along with government contracts issues, litigation, IP and compliance work. I'm also the ethics officer for the company, responsible for our ethics compliance program, as well as secretary of our board of directors, where I act as legal adviser to the board."

"I recently completed our annual ethics training at a number of our offices. After each training session, I would have a line of employees waiting to speak with me about various issues. That got me thinking that a lot of employees don't feel they have a direct line of communication to me at corporate. They might not feel that the issue is important enough to bring up with the GC. It made me realize that in-house lawyers need to get out of headquarters more often and go to the employees, instead of waiting for the employees to come to us. We have to get out to the field and foster the client relationship a little bit more."

Scott is absolutely correct and what a better time than to emphasize SOX Section 806. Protecting the rights of corporate whistle-blower's is the GC's responsibility in combination with an external ethics hot line for employees. While there have been plenty of other people calling for reform on other burdensome and expensive components of SOX, no one is going to touch Section 806. Employees don't understand the implications of the law and corporate management can't under estimate the impact of this in terms of potential litigation it may face.

Achieving a Defensible Standard of Care requires a General Counsel with the vision to address a spectrum of legal and ethical risks in the modern enterprise. When this is finally accomplished, the Michael Clayton's in law firms around the globe, will be looking for a new career.

operational risk