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7 worst practices GCs should avoid

Errors come in the form of strategic bad judgment or tactical misses in the throes of drinking from a fire hose.

If you're a new general counsel, you can learn a lot about avoiding worst practices from seasoned GCs and board members. This month's column may help new GCs accelerate that learning while reducing the pain. Errors come in the form of strategic bad judgment or tactical misses in the throes of drinking from a fire hose.

Failing to pay attention to relationships as well as your legal responsibilities to the company can cause serious issues. Strong relationships with those who interface with the board are key. In addition to the CEO, consider the CRO (chief risk officer), the CFO, the ethics officer, and the heads of human resources and internal audit, and perhaps some business unit leaders as well. This group is the GC's “magic circle.” Getting context, advice, the benefit of the experience from, and collaborating with, this magic circle, according to experts, is essential to the new GC successfully navigating mine fields and pitfalls.

Here are seven worst practices that you’ll surely want to avoid:

  1. Fail to learn about the board members’ relationship with the CEO. Before entering the boardroom, learn as much as you can about each board member and his or her relationships with the CEO. Of course, first get the CEO's take on each board member.

  2. Second-guess the CEO in front of the board. A GC can easily err by giving an opinion to the board without first knowing whether or how the CEO weighed in on that matter. Be sure to know the CEO's position.

  3. Communicate with the board without the CEO's OK. Given that the GC has a fiduciary duty to the board, the GC will have to communicate with directors. But not getting a blanket buy-in from the CEO up front could lead to tension or worse down the road.

  4. Fail to maintain board confidentiality with the executive team. The GC's fiduciary duty to the board requires the GC to maintain the confidentiality of executive sessions in which the GC participates. When pushed by the CEO to reveal information from an executive session, the GC can get caught in the middle. Stand your ground, but do it respectfully.

  5. Not understand what is important to board members. Board members often are rightly concerned about liability and their reputations. They don’t like surprises. Do they expect the GC to participate actively in meetings? What communication should be oral and what should be written? How should important communications be sequenced among and between board members? Meet with each board member and ask about his or her expectations.

  6. Not do your homework. One GC shared that as a new GC, she was asked to provide audit committee minutes to the external auditors. She did so, but inadvertently included executive session minutes, which were not to be shared. The minutes documented inquiries regarding changing auditors. The external auditors called the audit chair to discuss the issue. The audit chair was furious with the GC. Had the GC reviewed the minutes more carefully, she could have saved herself a big headache.

  7. Focus on the legal work rather than the relationships. Build relationships with people who understand or are influential with the board before those relationships are tapped. When a GC joins the company, fixating on legal issues could distract the GC from building relationships with those who have a larger view of the enterprise. These are the people who likely have been in the boardroom. Positive relationships with them are critical to your success.

Stewart Hirsch

Stewart Hirsch, Esq. Managing Director of Strategic Relationships LLC, is an executive and business relationship coach for general counsels, lawyers and other professionals. Formerly, Stewart was...

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