Close to 75% of directors believe the board should be involved in the selection of the GC
Boards rely on general counsel more than ever, according to a new study conducted by US-based boutique executive search firm BarkerGilmore, in partnership with Corporate Board Member.
The study of 226 public company board members conducted in January 2022 found that 75 percent want their general counsel to express views on business strategy and actively participate in strategic planning, in addition to carrying out the core responsibilities as legal counselor and manager of legal risk.
Adding the GC’s voice to any strategy conversation only helps strengthen the directors’ duty of care argument, the study found. In fact, 86 per cent of directors say the GC routinely attends nominating/governance committee meetings, while 79 percent say the GC attends audit committee meetings. That proportion is slightly lower, at 59 percent, for compensation committee meetings.
Results of the study show that 73 percent of directors believe the board should be involved in the appointment of the GC, and none of them recommend exclusively considering internal candidates. The general sentiment shows alignment among board members that the chair, lead director, or the nominating/governance committee should be given the opportunity to review the final candidate and provide guidance, though it is not the board’s role to select the GC.
In reviewing these results, John Gilmore, managing partner of BarkerGilmore, said that during the search process for a new GC, “the board values and recognizes the importance of soft skills, such as character, communication, and leadership, but expects these skills to have been evaluated and confirmed by the CEO and members of the ELT during the interview process.” The board expects involvement in the search process but trusts the CEO to make the selection.
Overall, the survey reveals opportunities for boards and GCs to improve their relationships and expand their contributions beyond the issues of corporate governance, compliance, ethics, and regulatory compliance. Deep knowledge of corporate laws and regulations are inevitably top-of-mind when choosing a general counsel – and unsurprisingly topping the list of skills and attributes most important for the job, according to directors. However, for boards to derive added value from their GC and the strategic insights they seek from the role, the focus may need to change.