General Counsels and Director Management

This March 2022 survey of 125 General Counsels (GCs) indicates ineffectiveness in director management activities across boards. The below information is sourced and shared from the survey by Gartner, Inc. in March 2022 and Lawyers Weekly article on GC ineffectiveness. Learn more about the General Counsel poll results and insights below.

Director Management poll indicates ineffective General Counsels

THIS REPORTS KEY FINDINGS:

  • The activities that General Counsels are ineffective at are all related to director management
  • GC rate the corporate approvals process as their most effective board management activity
  • Sourcing and recruiting new board members based on the gaps and needs of the existing directors is key
  • Director management can be significantly improved by taking a “life cycle” approach

 

Director Management, where General Counsels fall short

Figure 1: General Counsel Effectiveness at Conducting or Facilitating Board Management

Figure 1- General Counsel Effectiveness at Conducting or Facilitating Director Management

“Engaged and well-qualified directors and positive board dynamics are fundamental to a well-functioning board of directors,” said James Crocker, senior principal, research in the Gartner Legal, Risk & Compliance practice. “This depends on board management activities that are often part of the general counsel or corporate secretary’s responsibilities.”

GC rate the corporate approvals process as their most effective board management activity. However, director management is an area where GC rate themselves as relatively less effective (see Figure 1).

“Director management is especially important in times of change and volatility to make sure the board is well equipped to handle a shifting environment and new business priorities,” said Crocker.

 

Director Management Life Cycle approach

Director management can be significantly improved by taking a “life cycle” approach. Each element of director responsibilities are treated as a part of a larger whole that contributed to all other stages.

“Performance evaluations should help to identify skill gaps and inform director education, as well as the search and recruitment phase of director management,” said Crocker. “Keep things relevant by basing skills and expertise assessment on the organisation’s strategic direction.”

 

ESG oversight a new top priority for stability

One source of volatility requiring comprehensive director management is environmental, social and governance (ESG). While companies are taking meaningful steps on ESG, many still have a long way to go to live up to the standards of new proposed legislation.

“Most general counsel accept the importance of ESG expertise on the board,” said Crocker. “Yet just 30% of boards actually possess any ESG or environmental expertise. Key to improving the situation will be director ESG education on the most relevant ESG topics for the business, which can be delivered by in-house experts.”

Director management, however, should play a wider role than just educating existing board members. Formally identifying skill gaps, evaluating existing directors and feeding that into the process of sourcing and recruiting new board members is key to building the needed expertise at board level.

 

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