In times of crisis or not, a general counsel must be aware of his or her role and how he or she should communicate with the board. However, as noted by moderator Ann McLaughlin Korologos, former US Secretary of Labor and former chairman, RAND Corporation Board of Trustees, that role can oftentimes be conflicted given the GC’s seat on the executive management team while reporting to the board and keeping it advised.
Panelist Cheryl Mayberry McKissack, a director of The Private BanCorp, Deluxe Corporation and University of Chicago Hospital who has sat on corporate boards for more than 10 years, believes the role of the GC today is that of a partnership. GCs have to manage this role by not only being knowledgeable on a number of areas of interest to the company, but also by building trust. For a GC to be successful today with boards, they have to be viewed as a valued and trusted partner. She says that the efforts of the GCs she has worked with has been invaluable and she wouldn’t want to serve on boards without them.
Role of a GC in a Crisis
“Listen with two ears. I always tell myself when I go into a meeting that I have two ears and only one mouth,” said Cheryl Gordon Krongard, a director of Legg Mason, Inc. and US Airways Group, Inc.
Krongard went on to mention that she thinks women should not be defined by a title. Every GC she has worked with has defined his or her role in a way that works for them. She encourages people to be individuals and take everything seriously.
She elaborated that it is also important for a GC to be concise, prioritize and present the most important information to the board in times of crisis or not.
The Role of GCs and Outside Resources
Krongard said it’s important for GCs to be able to reach out at a moment’s notice to hire appropriate advisors -- outside counsel, outside auditors, etc. -- for the appropriate constituencies.
McKissack said it has been extremely helpful to the GCs she has worked with to get another opinion, such as additional advice in certain areas that a particular GC might not be highly familiar with.
Compliance and Risk Management
Korologos wrapped up the session with two very important areas and one familiar topic also discussed in the keynote panel. Korologos first stressed the importance of compliance.
As businesses expand and grow, and their roles become ever so complex in dealing with the changing rules of doing business around the world, Krongard urged GCs to stay on top of everything, keep a list and follow up on it. “If you open a door, it’s going to stay open in my mind until you close it.”
Panelist Dorothy Johnson, a director of Kellogg Company, said that compliance is a drop-dead issue and GCs are instrumental in informing boards and giving guidance on the topic.
The panel also reiterated the importance of risk management for GCs. Krongard urged the audience to think more about not just how decisions will negatively impact a business, but how they will impact the business if risks aren’t taken.