A view from the top: what the board really, really wants
Former senior partner in a large law firm, and now multiple board member Pip Greenwood, shares her experience of in-house counsel – from a board’s point of view.
Pip Greenwood is a former senior partner in a large law firm, and now serves as a highly experienced director on multiple New Zealand boards, including Westpac NZ; Fisher & Paykel Healthcare; The a2 Milk Company; and Vulcan Steel. She was also previously on the board of Spark.
Before becoming an independent, non-executive director she says she didn’t fully appreciate the role of in-house counsel.
“I’d never done a secondment, done a stint, never been in-house counsel,” she says. “My visibility and understanding of the role of in-house counsel has increased through being a director.”
She says she learnt early on that she was the person on the board receiving legal advice, not giving it, though her legal training gave her insights.
“The value in-house counsel provides is just immense,” she adds. “From a board perspective, they’re your eyes and ears in terms of legal issues. Obviously, I’ve got expertise so I can ask questions and I can spot things as well. But in-house counsel really has that lens of understanding the context, and the business context, in which to think about legal issues. That’s quite different from asking for external advice on particular issues or points.”
Pip says that the in-house team has a view on the risk appetite of the organisation. They ask questions such as: where do things sit on a risk scale? What is the acceptable risk for this organisation? What are the things we should be concerned about? How much risk are we prepared to live with?
These questions, in turn, help inform the board.
The value in-house counsel provides is just immense. From a board perspective, they’re your eyes and ears in terms of legal issues.
“I had a really good example before Christmas of the value of the General Counsel,” she says “We had a particular issue which was very difficult. The General Counsel wrote an excellent two-pager, really summarising it, and then the board put him on the spot. He gave a very good view of his perspective which helped inform the board’s conversation and decision making.”
Pip says that the unvarnished view is often very important, and that’s something general counsel needs to have the mettle to provide.
“From the top, you need to rely on the unvarnished truth. Where there are issues, you’re relying on the general counsel or internal counsel to point these out,” she says. Last year, informed of a very difficult regulatory issue, she chose to contact the general counsel ahead of time.
“I had a chat … just to make sure I understood the context. At the board meeting I was asked for my view. The General Counsel was very appreciative because I could give a view that person couldn’t. That was a great example of us working together,” she adds.
In highly regulated businesses, such as in financial services or telecommunications, Pip says board members rely heavily on in-house counsel, so they can form a perspective on “where to land” on issues. The requirement for continuous disclosure, for example, in other companies means in-house counsel’s advice is likewise sought regularly and intensively by the board.
In-house counsel must also have a lens looking forward, to see what’s coming over the horizon.
“That’s a role for them to play. If you can get ahead of things, you’re in a much better position,” she says.
Tips for dealing with the board
- Who is the client? It’s sometimes necessary to interact with the board, not just the executive – no matter the reporting structure. The board should feel free to ask in-house counsel questions; and they should feel free to respond independently.
- The general counsel as influencer. For this edition of LawTalk, many interviewees (general counsel) told us that they led by influencing – to change a board’s mind, or to ensure the Board centred on the right issues.
- Solution focused. The board wants more than legal issues raised. It wants solutions offered.
- Short papers. Boards ask increasingly for short, to-the-point papers.
- No surprises. Boards look for in-house counsel to see what’s coming over the horizon and prepare. This includes changes to legislation, but also views on “trends” and “risks”. Boards need oversight of the big picture as well as insight into the sector.