India Inc. stands at a very transitionary phase when it comes to the in house legal leaders of various corporates today. From being merely a combating corner to legal hassles to an inevitable role in the board rooms today, general counsel have paved a completely new roadmap for the nextgen in house legal professionals to come. Lex Witness gets into a conversation with veteran Badrinath Durvasula, Senior Vice President, Adani Group to get his views on this paradigm shift that we are going through while he was in the capital for the Summit Chairmanship at the New Delhi Edition. Here are some excerpts.
Martin Luther King, in one of his faMous quotes said:
“If you can’t fly then run, If you can’t run, then walk, If you can’t walk, then crawl, But, whatever you do, You have to keep moving forward”
This is apt for the General Counsels (GC) in thick and thin. They need to run or crawl, come what may.
The year 2017 is trend setting for GC’s, domestic and international, emerging from the shadows of corporate managerial grid.
If we notice the legal trends in the last two decades, it is obvious that there is an increased shareholder activism in companies. This is a result of transparency in governance and the active role play regulators. The company law boards and tribunals became more aggressive. Public interest litigation became the offshoot of every corporate action. Corporate rivalry due to competing trends reached its zenith. The debates at an Annual General Meeting are no more orchestrated. Board of Directors and in particular, independent Directors are taking stand, which is fair and reasonable.
Collectively, the activism of stake holders towards good governance’ raised the bar for the GCs. The CEOs and directors are keen to lend an ear to the GC in establishing “best practices” all through. The managements expect legal professionals with specialized skills to identify the areas of risk, assess compliance policies and help accomplish strategic and financial goals. The new found dynamism in “corporate governance” can be seen all over, from MNC’s to promoters. In a way, it is a dawn of a new era, where legal professions and GC’s play a pro-active role.
The expectancy from the Board of Directors and top management drives the General Counsels to contribute in a significant way to risk-awareness and risk – mitigation. Legal professionals, who worked for MNC’s, PSU’s, Large Corporates, exposure to M&A, Compliance, Regulatory insights, flair to the view of tribunals are more welcomed. The insights shared by them are taken seriously. This, in itself, raised the bar of GC’s in comforting the managements.
With surge in intellectual realm, GC’s are tending to be business-savvy. How well the GC facilitates a business decision or how well he orients in crafting necessary deeds creates a benchmark. It is now common to spot a few GC’s, who have a star repute, within the circles and in the eyes of the companies. Thus, it is symbolic that no other time can be better than the present time. GC’s have top-notch networking skills, forecasting a judicial view, analytical abilities and trained to examine issues from a 360 degree perspective, which makes them unique.
The more a GC learns, the more he earns. This is motivational and inspirational for the legal community, to keep raising the bar.
Apart from the legal advice they tender, GC’s contribute substantively when reviewing shareholder communications, whistleblower policies, intellectual property matters, lobbying decisions, issues concerning labour and employment. The thin line between an IR expert and legal professional is getting merged, more into the domain of legal. GC’s are expected to have domain expertise on internal investigations, regulatory enforcement, securities litigation, executive compensation, CEO succession, business strategy and antitrust concerns.
With the emergence of technology, sweeping the performance of any business, most companies are concerned about cyber security, patent and trademark issues, which GC’s are well equipped to advise. If a company is contemplating a merger or IPO, GC with desired exposure and experience with security regulations and compliance programmes is a beacon of light to the board. GC’s are expected to have a global outlook, insights on entering new markets and dealing with various jurisdictions, to give any business a paradigm shift. It is, thus, not uncommon to see a few GC’s with proven ability to ascend to the boards, and eventually occupying the chair of a CEO or a COO.
The emergence of the role puts an onus on how well one performs. It is not mere knowledge that makes one tick or click, but a set of intellectual and behavioural traits determine what he would be. Which are those attributes?
GC should be integral to corporate culture, understanding the company bottom to top. He should also be a team player showcasing the attitude in carrying the responsibility. GC should stretch to know the clients, internal and external, whereby expectations from them and company becomes clear.
Most companies expect the GC’s to have a firm grip on work prioritization. This would greatly help in reinforcing the trust of the management on the role and brings in a great respect. A robust understanding and performance on budgets, the bottom-line of every company, would enhance the persona of the individual.
GC’s who serve on boards should help their fellow board members focus on achieving the business objectives, while keeping an eye for and minimizing potential legal risks. They can also help the board balance those risks against potential gains. And since directors bear increasing liability for their decisions, it can be reassuring for other board members to look across the table and see that a lawyer has carefully analysed, and thus is l comfortable taking the risks. Risk being the epitome of business centric activity, GC’s presence and advisory would greatly mitigate the factor to spread the wings in business.
Abraham Lincoln, in an inspirational quote reiterates “It often requires more courage to dare to do right, than to fear to do wrong”
“The role of a GC, in the last couple of decades in particular, made an evolutionary ascent, although laced with some caveats. The functions of the In-house counsel evolved from reactive to proactive, and boards are reaping the fruits of this transition. The role involves not in just dealing with past problems, but in charting the course of future action. It is no more playing a strategy of defence, but turning the tables on to be on offensive. It is no more a role for mere legal advice, but is for business enabling.”
While key performance indicators, such as loss prevention, control of litigation cost, net revenue, output, and productivity are the assessable parameters, the value of the GC, in particular relating to advisory, extends far beyond the financial metrics to include the sum total of the intellectual contributions made to the leadership of the company
The pace at which a company penetrates in domestic impregnable corridors and international markets infers to the coordinative efforts of GC’s contribution.
The role of a GC, in the last couple of decades in particular, made an evolutionary ascent, although laced with some caveats. The functions of the In-house counsel evolved from reactive to proactive, and boards are reaping the fruits of this transition. The role involves not in just dealing with past problems, but in charting the course of future action. It is no more playing a strategy of defence, but turning the tables on to be on offensive. It is no more a role for mere legal advice, but is for business enabling.
Having seen the expectancy of the top management in an ever-increasingly litigious corporate environment, it is no longer acceptable to have GCs wait on the side-lines. Instead, it is critical to utilize the full business and legal acumen to propel the organization forward, make the riskaware decisions, and help management build strategies for success.
In the words of Swami Vivekananda “Arise, awake and stop not till thy goal is reached”. To cherish the dreams of a GC, it is also said “If you don’t sacrifice for what you want, what you want becomes the sacrifice”.
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