The Measure of Success: What Good Performance Looks Like for a General Counsel During a Crisis
By Deborah Ben-Canaan and Suzanne Folsom
As companies globally manage the impacts of the coronavirus pandemic and chart the path forward, strong leadership, particularly from their general counsel, will prove to be of critical importance. Indeed, the current crisis is a textbook case of where the value of a strong CEO-General Counsel (GC) partnership truly matters. The right GC—one who is highly competent as well as strategic—can help lead an organization through the storm and position it for success in the new business normal as communities, states and countries begin to transition to the workplace of the future.
The general counsel’s key twin areas of responsibility—managing the corporate legal function and safeguarding the business against new risks—uniquely coalesce and exponentially increase during a crisis. In addition to the normal workload of a GC, and her or his team, the legal department is now addressing novel employee work as well as health and safety issues; maintaining a strong regulatory and compliance infrastructure while addressing new risks; reviewing corporate contracts that have all but been upended; and seeking solutions to supply chain challenges that have never been addressed before.
The GC must also look to identify and define the unknowns and guard against new risks. COVID-19 has brought additional challenges, including establishing enhanced controls to protect the corporation’s IP and sensitive data from bad actors as the workforce adjusts to working from home, defending against new litigation, tackling back-to-work safety issues and seizing new opportunities, be they government aid programs or M&A possibilities.
How, then, does a GC stand out in general and particularly in times of crisis?
What a CEO Is Looking for and What GCs Can Do to Shine
A crisis offers the GC an extraordinary opportunity to demonstrate her or his superior leadership skills. The CEO wants people on the team who can be relied upon in good times, as well as when the organization is under stress. Like all members of the C-Suite, the GC needs to continually add value and provide solutions in the face of difficult situations.
See the forest and the trees: The GC (and her/his team) needs to be omnipresent and simultaneously examine the core issue at hand—as well as all of its global ramifications. At the same time, the GC will need to be steeped in the facts and relevant details, thereby demonstrating clearly that he/she is on top of the issue and is making informed recommendations. When faced with a crisis situation, it’s helpful to look to companies (similar industries and beyond) that may have dealt with a comparable crisis and then analyze the steps they took to determine whether they were effective. There is no time to reinvent the wheel, especially in a crisis.
Be present all the time: Given that the GC plays such a critical role in crisis management—and, at times, coordinates the entire crisis response team—she/he should liaise with the head of corporate communications as well as the heads of other major functions (investor relations, for example) to ensure a consistent “all in” strategy and coordinated messaging (including addressing and correcting all misinformation quickly). There can no longer be siloed communications given that internal employee communications regularly appear on some form of social media in real time. To build and enhance the company’s credibility, the GC should make sure that the information that is shared is timely, accurate, understandable and as actionable as possible. During a crisis, business is a 24-hour-a-day operation, and the CEO and board will expect the GC to be readily available at all hours.
Empower the crisis team: Use the forum of the crisis team to drive the decision-making process. The GC should have a perspective but also listen to the views of every team member as they represent the voice of different stakeholders. An effective GC will accept and understand that there will be tough trade-offs and will balance immediate risks (including financial, reputational and political) with long-term ones. Often, in a crisis, short-term sacrifices must be made in order to survive and win the long-term game. It may be unpleasant, but viewed at an enterprise level, it may be a necessity.
Lead with strength and compassion: The CEO is also looking at how effectively the GC leads, communicates and interacts with his/her legal team during challenging times. Is the GC inspiring the legal team and leveraging the skills of every team member to help the enterprise prevail in a turbulent environment? Is she/he creating “stretch opportunities” to enable team members to participate on the front lines with respect to the legal, governance and reputational challenges faced by the company? Is she/he promoting top performers for roles on the company’s crisis response team and/or post-crisis lessons-learned team? A crisis provides a critical opportunity to develop leaders and to let rising stars shine. A team will follow its leader’s example; a team will also lean on their leader for guidance and reassurance. A GC should address the needs of every member of the legal team and promote a positive environment, even in the darkest times. It is also critical that the GC be as forthcoming as possible and transparent because the team will appreciate being “in the know” even when the answer is “I don’t know.” The CEO will be watching and evaluating how the GC leads his/her team in uncertain times.
Reinforce commitment to compliance: In times of crisis, the GC must make sure that the compliance department is focused and has adequate resources and support. He/she should also facilitate the continued “tone at the top” and “tone in the middle” compliance messaging throughout the crisis. Bad actors seek to take advantage of distracted executives and employees during a crisis and accelerate their efforts to find back doors and other entries into companies—both physical and cyber—because they know that resources have been redeployed and focus has been shifted. A strong crisis-minded GC will not let his/her guard down with respect to the ongoing compliance program of the company. Crisis situations—especially those that have national and international ramifications—may also trigger new regulations that need to be scrutinized by the legal and compliance team and followed by the company. Regulations imposed in connection with the receipt of government aid—which is certainly the case for thousands of businesses with respect to the COVID-19 crisis—require additional attention and ongoing monitoring.
Be proactive: GCs routinely monitor legal, legislative and a host of other potential threats as part of their overall remit. Pre-crisis, the GC should already be playing an active role in the corporation’s enterprise risk management process (ERM), helping to identify and order risks and ensuring that new information is regularly mapped to the risk profile. Scored against a predetermined severity matrix, these results should help to determine the potential impact of a particular incident or threat, and the attendant protocol response. A robust ERM process best positions a company to be able to respond quickly and effectively when most crisis situations present. However, there is that one-in-a-million crisis situation not previously anticipated/prepared for by your company—such as the current pandemic—that does hit, requiring the GC to take a leadership role in stewarding the company to the other side of the situation. Presumably crisis response plans that were put in place and which employees trained for to deal with other crises can be leveraged even in an unanticipated crisis situation. If, however, your corporation does not have an ERM process, the GC must advocate for the implementation of one. The advent of COVID-19, with its significant human and economic devastation, illustrates the need for corporate risk management.
At the end of a crisis, the GC (and all C-Suite leaders) will be judged by the CEO on their performance during the crisis as well as by their post-crisis actions. It is imperative that the GC help the company shift from crisis mode back to a normal business routine as soon as possible. In the age of the coronavirus, steps taken by a company during the reopening of America may be just as important, if not more important, then the actions taken post-crisis as we embark on a new way of working. A crisis offers a treasure trove of lessons learned, and mining those lessons is one of the most underdeveloped aspects of crisis management. The GC should drive this initiative and engage in a meaningful after-action review of how the team responded to the crisis to best prepare and plan for future crises. Strong GCs will be recognized for their leadership and foresight throughout the duration of a crisis and beyond.
Deborah Ben-Canaan is the Senior Practice Leader for the In-House Counsel Recruiting division within Major, Lindsey & Africa. She has counseled myriad general counsel on how to be best business partners to their CEOs. Suzanne Folsom is the new Senior Vice President and General Counsel of Philip Morris International Inc. She is a former partner at Manatt, Phelps & Phillips, an independent board director, and the former general counsel, chief compliance officer and senior vice president of government affairs and global public policy at United States Steel Corp.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.