ACC CEO Veta Richardson talks about the organization's new agenda. Her remarks have been edited for length and style.
CCBJ: Let’s talk about the Association of Corporate Counsel’s Strategic Plan 2.0. Given the goals ACC has laid out in the plan how is the organizations looking to reshape the practice of in-house law?
Veta Richardson: Like everything that we do, our new strategic plan that the ACC board of directors approved this past fall focuses on how we will better serve ACC’s global membership through 2022. In developing SP 2.0, we conducted an extensive survey to solicit members’ opinions about a variety of current and potential ACC services. We held focus groups, both in-person and by conference call. I am not sure that should be described as looking to reshape the in-house practice of law, but we are looking to keep pace with the changing needs of our members.
We heard that members continue to look to ACC for opportunities to connect with a global peer-to-peer network, for education that addresses their legal and business training needs, and for information and legal resources that support their ability to serve their corporate clients.
We also heard that at different stages of their careers, our members have markedly different needs. And so as ACC moves forward, we will be serving those needs a lot more strategically, at different career levels, in addition to the other ways that lawyers define themselves – by practice group, by geographic location, by industry, etc.
Tell us about the paper ACC recently submitted to the National Association of Corporate Directors for their Blue Ribbon Commission report on corporate culture.
Richardson: One of ACC’s key objectives under our new strategic plan is to step up our advocacy regarding the role and positioning of the chief legal officer to assure that universally, around the world, the CLO is recognized as a respected and credible business executive who brings a lot of value to the organization.
We have done research into the evolving role of the general counsel, and we have continued to find that not all general counsel report directly to the CEO, and not all general counsel have continuing access to the boardroom when those critical discussions are underway. From a governance perspective, we think that sends entirely the wrong message, so we decided that ACC needed to do more to raise the importance of the general counsel having a seat at the table.
When we learned that the National Association of Corporate Directors would be examining the issue of corporate culture, we saw this as a wonderful opportunity to underscore how the general counsel is an instrumental ally both to the chief executive officer and to the board of directors in helping to set that right tone from the top, that the company will do business in a legal, ethical and compliant manner.
So Mary Blatch, ACC’s director of advocacy and public policy, and I co-authored a white paper titled “Leveraging Legal Leadership: The General Counsel as a Corporate Culture Influencer,” underscoring two key points: that general counsel, in order to do the job they’re hired to do, need to report directly to the CEO, and that they need to have visibility and participation at the board meetings (see “Culture Counsel,” page 6).
After we submitted the paper, the issue was debated within the NACD Blue Ribbon Commission, and ultimately ended with a recommendation to boards of directors that they carefully consider the role and positioning of the chief legal officer, in addition to other officers who may touch on risk-related functions.
We were delighted to see ACC’s position and our paper cited in NACD’s report and intend to do more to keep this issue top of mind as a model governance practice. We won’t stop until all CLOs report directly to the CEO and have a voice in the boardroom.
What is the risk if the general counsel is reporting to someone other than the CEO?
Richardson: The risk to the company is that, absent the GC’s input, the CEO and executive management may make decisions that move the company in directions that are illegal, unethical or create the type of mess that a lawyer ends up being called in to clean up but could easily have been avoided altogether had the GC been included from the onset.
If a CEO with the discretion to create the organizational chart and reporting structure that works best chooses to hold the lawyers a step or more removed, then you have to wonder whether that chief executive is having conversations about doing business multinationally or setting strategy for the company that, well, we just see that as a danger.
As Ken Frazier, chairman and CEO of Merck & Co. Inc., put it, if the CEO isn’t listening to the lawyers, no one else in the organization will. I could not say it any better than Mr. Frazier, who also happens to be a former general counsel. It really is a matter of good governance practices.
So how can legal and business communities tap the full potential of the general counsel role?
Richardson: It starts with making sure that you include lawyers at the front end of the conversation, as strategies or transactions are being considered, so that in-house counsel have the opportunity to offer input at the onset. Because what we see is, if they don’t have that opportunity and things are structured in ways that are not in compliance with the law or in the company’s best interests, then lawyers end up being people who run after problems that have been created, trying to clean up and solve them then, instead of being part of the discussions to prevent those problems in the first place.
We also believe that in-house counsel can offer important insight and value, as they understand the company and its objectives, which means they are well-positioned to help shape solutions to business problems. Their voices must be at the table.
Veta T. Richardson is president and CEO of the Association of Corporate Counsel, the largest global legal association serving in-house counsel. Previously, Richardson held executive-level positions in the nonprofit association realm and served as in-house counsel at Sunoco, Inc., where she was responsible for corporate governance, securities disclosure, financings and M&A transactions. She can be reached at [email protected].
Published January 11, 2018.
