The Association of Corporate Counsel ran a piece earlier this month discussing how General Counsel can leverage their position to help boards navigate ESG and properly manage risks and opportunities. Here are some key takeaways:
- ESG presents a variety of risks and opportunities companies must be aware of.
The “green wave” is here, and the general counsel is uniquely placed to ensure that the board and the company as a whole are aware of both the opportunities it brings as well as “the adverse consequences of maximising the short-term financial interests of shareholders at the expense of… environmental considerations (and of longer-term shareholder value),” according to Corporate Law by Elizabeth Boros and John Duns.
- The GC is uniquely positioned to understand the whole of a business’s operations and communicate the value of ESG to the board.
“Often the GC holds a broader executive portfolio within the company beyond legal, such as corporate affairs, company secretarial, and risk. It may also be a member, or invited to observe the meetings, of the board and its subcommittees. This equips the GC even further in their holistic and cross-functional understanding of the company.”
- Seasoned GC’s have excellent communication skills which can be leveraged to breakdown complex concepts.
“The ability to understand a complex topic, unpack the issues, and translate it into simple terms is a talent that many experienced general counsel possess. They can play a crucial part in ensuring the board is provided with the requisite knowledge and skills regarding the subject to determine climate strategy, make climate initiative assessments, and mitigate risks.”
- GC’s understand governance mechanics and the laws governing them and can setup governance structures that allow companies to get the most out of their ESG efforts.
“Advisory to the board on the establishment and structure of board committees is an additional task that the general counsel can assume to empower the board. The general counsel can provide guidance on committee charters, roles, responsibilities, and reporting lines to ensure effective climate governance oversight.”
We’ve written before about how legal departments are overwhelmed by ESG management, but there’s no denying that their position makes them uniquely situated to take on the challenge. Companies should continue to leverage the skills of GCs without working them to death.