Never before has so much been expected of GCs. From business manager, to communicator, technologist to risk manager, the role of a GC is evolving at an unprecedented rate. This is according to the latest report from consultants KPMG. From my perspective, the report stands out because it captures the zeitgeist of our industry – and where I believe it is headed in the future.
Previous reports from KPMG have interviewed GCs themselves, but this report, titled ‘Through the looking glass’, took a view from another perspective. The report is based on interviews with 34 corporate leaders – CEOs, board directors, chairmen and non-executive chairmen across Europe. This makes the report unique. We know that the in-house legal team are under increasing pressure to be commercially-focused, and the report encapsulates how corporate leaders are thinking and feeling about GCs. It focuses on three core areas:
- how the GC adds the most value to the board of directors and to the business in general;
- how corporate leaders expect the GC role to change over the next 5-10 years; and
- how GCs can add more value in the future.
Because business risks and regulatory, corporate and commercial law are becoming ever more complex, the report asked the leaders to rank the top five risks on which a GC should focus. These were identified as:
- Technology-related risks
- Contract management
- Corporate reputation
The most interesting part of the report for me is that it provides an outline of the five main attributes that are required of the GC of today and tomorrow. I will be writing a blog about each of these attributes in more detail over the coming months. To summarise:
The good news, according to the report, is that, despite the pace of change and the expectations that corporate leaders are mounting on GCs, the chief legal officer is rising to the challenge of managing the demands of commerce with the business of law. The balance for a GC is managing the risk against the opportunity; not saying no to everything, but weighing up which risks are worth taking for commercial gain and advising the board accordingly.
The Risk Manager
As the hazard horizon continues to grow, according to the report, managing risk is still the primary role of a GC. The key for GCs is to deal with risk as business optimization, and the way to do this is critical thinking. The challenge is maintaining the balance between risk and opportunity. However, the report states that GCs are uniquely qualified to achieve that balance because of their specialist training.
From my perspective, this was one of the most interesting areas of the report. The combination of cyber threats with the onslaught of new technologies being demanded by CEOs and corporate leaders each day means that we hear a lot of our customers discussing the challenge of technology in the GC role. The report echoes this, stating: “A GC needs to understand what the technology does, what it can do and the associated risks. The GC must be alert to all the risks and opportunities arising from a technologically-driven world.” Another aspect of the technology champion attribute was how technology can help create greater efficiencies for a GC, and how data analytics will impact the role. This is where I see the greatest impact, and I’ll explore this in my more in-depth blog post on technology in the coming months.
The increased visibility of the GC at board level means it is crucial for them to be able to communicate effectively with the board, management and employees. Skills such as presenting, communicating and connecting people are imperative for a GC who wants to grow within the business. And, the report states, it’s not just at a board level. Managing their own team effectively, delegating and understanding personnel issues are also seen by corporate leaders as within the realm of an effective GC. This includes another aspect I find particularly interesting – the balance of outsourcing various tasks with the need for a highly-skilled, efficient and effective team of in-house lawyers. I’ll cover this, and why I think this is crucial, in my more detailed blog on this topic.
Builder of corporate culture
Being aware of risks is a GC’s domain, but building a risk-aware culture can only help to reinforce the defenses a GC puts in place. The report states that a risk-aware culture will also help nurture opportunities and give insight into not just what is happening now, but what will be happening down the line. In the report, one CEO stated that GCs need to think in terms of playing chess; not just thinking of the next move or two, but many moves ahead.
The report concludes by returning to its initial questions:
The key value that corporate leaders believe a GC brings to the business is a holistic overview of the company, from strategic vision to the regulatory and legal climate, as well as the risks and opportunities at hand.
The future trend that GCs must understand -and be on top of – is developments in technology. Risk and opportunities are huge when it comes to technology, and a GC needs to understand and be aware of any that could impact or benefit the business.
Finally, according to the report, the key growth area is communication across the business, from board presentations to PR, to internal management team meetings – a GC must be confident in establishing trust through communication with everyone across the company.
Over the coming months, I will go into each of the above attributes in more detail and reveal why I think they are so important – now more than ever – as well as give you some useful hints and tips on ways to develop these skills.