Tag Archive: general counsel

Reviewing the Corporate Counsel’s Playbook

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Hurricanes. Hostile Mergers. Data breaches. A misconstrued comment on social media. These are a few of the real and figurative storms that companies weather regularly with the help of internal and external staff, and regular advice from their general counsel (GC).

James Barron

The National Association of Corporate Directors (NACD) recently convened its General Counsel Steering Committee. Crisis communications counsel James Barron, a managing director of the New York office of Sard Verbinnen & Co. (SVC), a specialist financial and crisis communications firm, led a discussion of more than 30 GCs from top companies in a discussion on topics that keep them awake at night, including cyberattacks, scandals, and the delicate art of communicating to stakeholders when a crisis occurs.

Barron emphasized that often times the GC plays “the role of the company quarterback,” having witnessed this many times during his tenure at SVC. Directors often turn to their GCs to understand the roles they should play during a crisis, being cautious not to open themselves to future liability. General counsel can also be instrumental in ensuring that leadership proactively creates a response plan and then follows that plan should a crisis arise.

Concepts to include in the GC’s crisis playbook follow:*

1. Create a crisis response plan that is usable. No one has time to read dense policies in a crisis. “While there are some crises that can be anticipated and materials can be prepared in advance, I don’t believe in crisis plan books that are six inches thick,” Barron said. He pointed out that companies should take the time to identify and drill on the most likely crises, then use the lessons learned to refine crisis response processes and assign senior executives and board members to appropriate tasks.

2. Drill the plan. No company can prepare for every scenario that will emerge in a crisis, Barron noted that tabletop exercises can help GCs and boards identify their blind spots and fine-tune assignments of who will be responsible for what portion of the response. One Steering Committee member also pointed out that tabletop exercises surface differing opinions about how to handle a crisis. Consider, for instance, that the GC and the director of public relations often times have very different opinions regarding messaging and speed of outreach. Hashing out disagreements before an event occurs will encourage the GC, executives, and directors to present a united front when a crisis occurs.

3. GCs are Quarterbacks. Barron said GCs often play the role of organizing the team and breaking down silos. “GCs find themselves corralling multiple groups, including senior management, the Board, operational management and communications functions. In addition, they have responsibility for outside counsel and often specialist PR firms such as Sard Verbinnen,” he said. “Their role is often to balance competing needs, particularly where there is a tension between the business needs and legal requirements.”

4. Identifying the need for public communication. Barron reminded the members of the Steering Committee that during times of peace at the company, they should consider mapping out which scenarios will need to be communicated publicly and which shouldn’t, what regulatory and legal ramifications exist for disclosing and not disclosing certain matters, and communicate the plan to the board and senior executives accordingly.

5. Understand who must be included in a crisis response plan. One Steering Committee member brought to the group’s attention that sometimes regulations demand that the CEO is involved in response to a crisis. Still another mentioned that the board at his company could not be involved in crisis response because they could not move at the speed that their senior management team could respond.

6. Seek outside counsel when a key player acts out of step with the plan. Barron pointed out that even with a plan in place, sometimes a key executive speaks out of order during a crisis, causing tension and discord between the board, and other executives. In this case, Barron notes that it’s “sometimes easier for an external legal advisor or communications group to ensure that the right decisions are made.”

7. Update your corporate contacts regularly. Several participants pointed out that having the right phone numbers for the right people is essential when management, the board, and GCs have only minutes to respond to a crisis. While this seems like a fairly simple task, Steering Committee members pointed out that having a list of who needs to be contacted immediately should exist in the crisis-response playbook—including every possible phone number or other contact needed to reach that person. Contacts should also be kept fresh for essential regulators, outside counsel, and other stakeholders who may need to be contacted.

8. Plan for the long-haul. One GC pointed out that some crises require weeks and even months of attention from top-level executives and the board. In addition to planning for immediate response, Steering Committee members agreed that a chain of assistance should be built to support the work done by responding executives and GCs. Not doing so could create undue risk within the organization caused by neglected leadership.

NACD’s General Counsel Steering Committee brings together progressive general counsel from leading companies to engage in frank, informal discussions with each other and with NACD leaders about corporate governance practices and the changing business and regulatory environment. These conversations help inform the development of NACD resources, education programs, and events with a goal of strengthening the partnership between the general counsel and the board. NACD thanks the Steering Committee for its participation, and for strengthening and supporting the work of corporate directors across the country.

*All General Counsel Steering Committee meetings are held under Chatham House Rule. The names of GCs and companies are removed accordingly.

The Strategic-Asset General Counsel

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Kimberly Simpson

Kimberly Simpson

In June, NACD convened general counsels (GCs) from across the country for a one-day meeting in New York City on the role of the GC in supporting boards of directors. Program panels consisted of directors, GCs, and subject-matter experts on legal issues affecting board decision making.

The Evolving Role of the GC

According to Richard D. Buchband, senior vice president, GC, and secretary for ManpowerGroup, the GC must clear the way for the board to focus on strategic matters. Though each company is different, long past are the days when the GC’s role was to take minutes in the corner of the boardroom.

A clue to how a general counsel will be perceived in any given company may be found in the interview process, when a candidate should take note of whether board members participate. Also, in assessing how the board will utilize the GC, a candidate or sitting GC should be aware of whether board members hail from countries in which the GC traditionally takes a smaller role, reporting not to the CEO but to the CFO, according to Yvonne E. Schlaeppi, director for Stallergenes Greer and former GC for several companies, including Johnson Controls Europe.

Once connected to the board, the general counsel can be of value for many facets of the enterprise, leveraging his or her unique position in the organization to assimilate information and data from across the business. Several suggested that the general counsel should always offer a recommendation when providing input to the board. In fact, judgment is a critical part of what a GC offers the board. “The crux of a GC being a strategic advisor to the board is having your good judgment on the complex mix of puzzles which general counsels deal with all the time—including commercial, legal, and people challenges—recognized and valued,” said Schlaeppi.

Further, the career of Robert Bostrom, senior vice president, GC, and corporate secretary for Abercrombie & Fitch Co., illustrates how the general counsel can be the glue for an organization in turmoil. During a prior role as general counsel at Freddie Mac, he saw several CEOs and CFOs come and go around the time of the 2008 financial crisis and when the government appointed a conservator. Today, Bostrom co-chairs Abercrombie’s enterprise risk management group and leads the organization’s crisis management team, taking point on risks affecting the company’s reputation.

Moving the Board Forward

Of course, given that the GC is often the most knowledgeable person about issues of corporate governance, the GC brings tremendous value by providing advice and counseling on governance matters. Gillian A. Hobson, partner, capital markets and mergers & acquisitions at Vinson & Elkins, pointed out that such governance matters include issues such as independence, diversity, proxy access and others outlined in Commonsense Corporate Governance Principles, published in 2016 by a group of leading executives and investors. In addition, in order to move a board forward, the general counsel has a number of specific tools at his or her disposal. The general counsel can:

  • Suggest formats for a board evaluation and skills matrix;
  • Bring outside information (such as NACD’s Blue Ribbon Commission Reports) and outside perspectives (such as those from ISS, BlackRock and others) to the board; or
  • Develop relationships with board members, including board leadership and more progressive board members.

William E. McCracken, director for MDU Resources Group and for NACD, suggested that when boards get “stuck,” the GC is in a “unique position to lift the board’s vision up to see what else is happening out there.” Steven Epstein, corporate partner and co-head of mergers and acquisitions at Fried Frank, agreed. “The GC will be up to speed on the general M&A landscape and the latest thinking of the courts and will be well-positioned to combine that knowledge with the business objectives of the company, which is extremely valuable to the board.”

No Surprises and Keep It Short

Several times throughout the day, panelists espoused the best practice of imparting “no surprises” to the CEO or the board. For example, if the GC sets up lunch with a board member, Buchband suggests a check in with the CEO after the meeting is set but before the lunch takes place. “I ask the CEO if there are any issues he would like me to raise or discuss,” said Buchband. Keeping the board informed on matters affecting governance is equally important.

Also, all panelists reiterated how important it is for the GC to keep materials short and topline for the board. “We can be victims of our own desire to be thorough,” noted Buchband.

Enterprise Risk Management and Compliance Make the GC’s Job Easier

The role of risk assessment is not to avoid all risk, but rather to identify and manage risk, said George J. Terwilliger III, partner at McGuire Woods. In fact, Bostrom noted that enterprise risk management at Abercrombie helps him and the company prioritize risks. If a risk rises to the top, then a cross-functional, high-level team has agreed that it should be there, and he doesn’t have to champion the cause as a lone voice.

Daniel Trujillo, senior vice president and chief ethics and compliance officer for Wal-Mart International, stressed that a culture of compliance must start at the top. A program must then be implemented that is effective, consistent, data driven, efficient and sustainable. Terwilliger echoed that compliance has to be part of the fabric of the company, with the compliance council acting as a convener rather than as “internal police.” Today, predictive analytics help his team spot trouble early at Walmart, at the country or even the store level.

Consider Cross-Border Complexities

Just as Wal-Mart operates globally, so too do companies like Abercrombie. David H. Kistenbroker, global co-head of white collar and securities litigation at Dechert, reminded the audience to consider cross-border complexities when advising the board. Long-arm statutes in the United States and United Kingdom can impact deals all over the world. Due to such complexities, the GC is in a unique position to be a strategic asset to companies operating globally, especially where board members are all based in in the United States.

NACD would like to thank the panelists for sharing their experiences with attendees, and for these generous sponsors for their support of the event: Dechert, Fried Frank, KPMG, and Vinson & Elkins.


Kimberly Simpson is an NACD regional director, providing strategic support to NACD chapters in the Capital Area, Atlanta, Florida, the Carolinas, North Texas and the Research Triangle. Simpson, a former general counsel, was a U.S. Marshall Memorial Fellow to Europe in 2005.

Crickets, Divorce, Silicon Valley, and the Future of Governance

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One of my favorite comments from an attendee at last year’s Global Board Leaders’ Summit went something like this: “I was expecting to be informed; I wasn’t expecting to be inspired.” For a team that works year-round scouring the globe to discover and deliver to you voices that are shaping the future, that’s about as good as it gets.

KenSummitMainStage

This year’s Global Board Leaders’ Summit is on track to be our biggest ever, and one big feature of the Summit remains the same: a diverse array of thought leaders will share paradigm-shifting insights that will challenge the way you think about leadership, give you new tools to approach your directorship practice, and perhaps inspire you in surprising ways.

Here’s a sampling of some of the most exciting sessions at Summit this year:

  • Michelle Crosby’s start-up Wevorce is not only shaking up Silicon Valley, it’s turning the historic, antagonistic model of divorce on its head. The company’s mission is to “help couples ensure their divorce is less damaging to themselves, their finances, and the people they love.” Crosby was named one of the American Bar Association’s Legal Rebels in 2014, a distinction reserved for “lawyers who are breaking new ground using technology.” “Every institution is subject to change, and the more entrepreneurs who learn to work in the system to create that change, the further we’re going to get,” Crosby said in an interview with USA Today. In an intimate fireside chat, Crosby will discuss innovation, entrepreneurship, disruption, and how the company applies the Wevorce model to talent management inside the company.
  • Howard Ross, one of the most highly rated thought leaders at last year’s Summit, is back again to share insights from his groundbreaking work on unconscious bias, diversity, leadership, and organizational change. The question directors should ask themselves, says Ross, is not “Is there bias?” Rather, directors should ask one another, “What biases do we have that keep us from making choices counter to the values that we say we believe in?” Ross will open the Diversity Symposium on Saturday and will lead an in-depth workshop on Monday focusing on board dynamics.
  • The United Nations estimates that by 2025, two-thirds of the world’s population may face fresh water shortages, a critical concern for business and society. Whitewater rafting guide turned CEO Pat Crowley is betting that the solution to that crisis might literally be in our backyards. Crowley’s passion for the outdoors led him to work as a water resource planner, which drew his curiosity to crickets, of all things. “I heard about insects as a more environmentally friendly form of nutrition. From a water perspective, it was clearly a game-changer,” he said. Crowley founded Chapul, a company that makes cricket-based energy bars, in 2012, “to leap over this psychological hurdle of eating insects in the United States.” With explosive growth— 500 percent annually for the past two years alone—Crowley is on track to break through those barriers. On the summit mainstage on Monday, Crowley will discuss what it means to be part of building a new industry that is challenging societal norms, reshaping the competitive landscape, and may just help save the planet.
  • Phil Gilbert has been working with start-ups for the past 30 years, the most recent of which was acquired by IBM in 2010. Now Gilbert leads IBM’s design team with a focus on an empathy-centered workforce. Bringing a start-up mentality to 100-year-old company can be a challenge and almost immediately Gilbert was forced to confront a disconcerting question: “Is the entire way we’re working an anachronism?” Embracing that hard truth has been nothing short of transformational. Gilbert comes to the Summit mainstage to discuss lessons learned in this transformation. “We’re at an interesting crossroads in business. I think the way business is done and businesses work inside themselves has got to fundamentally change in the twenty-first century,” he said.
  • As managing director of famed Silicon Valley venture capital firm Andreessen Horowitz, Scott Kupor has been part of building brands like Airbnb, Buzzfeed, Facebook, Foursquare, Lyft, Pinterest, and Skype—companies that have become synonymous with disruption. “Things that are fringe today might become mainstream over time,” Kupor explained on Fox News back in June, describing the philosophy that underpins Andreessen Horowitz’s approach to finding the next disruptive trend. In a mainstage fireside chat Tuesday, Kupor will discuss this philosophy in context with everything from M&A activity and shareholder activism, to IPO trends and the next big innovations he sees poised to disrupt the business landscape.
  • When Chelsea Grayson took on the role of general counsel at American Apparel, she faced a daunting task: to help turn around a company that was operating in an increasingly competitive industry and was coming off of a tumultuous series of events, including high-profile sexual harassment allegations, layoffs, bankruptcy, and protests. In February, Grayson told the legal blog Above the Law, “I have been in-house for over a year now, and I have encountered just about every legal issue a general counsel might experience in an entire career.” Next month, Grayson will share her insights on governing complexity, a subject she has become adept at navigating during her tenure at American Apparel.

These are just a few snapshots of the incredible line-up of thought leaders who will join us in September. Want to learn more? View the full list of speakers and sessions at www.NACDonline.org/summit.