If GCs waived their long-term incentive plans, would boards make better decisions?

This article was first published by The Law Society In-House InsideOut Magazine on April 30th. 2018.

If GCs waived their long-term incentive plans, would boards make better decisions?

Board effectiveness consultant Ciarán Fenton argues for a more independent in-house function to enable better board decision-making. 

‘The whole world is in a terrible state of chassis,’ says Captain Boyle in the last line of Juno and The Paycock (1924), the play by Sean O’Casey.

He used the word chassis to give the word chaos a more profound and broader meaning, and to capture the madness of the times.

And a state of chassis is an appropriate word to use to describe current times in the world of politics and business. Trust in business is low; corporate conduct is still routinely poor, and political uncertainty, and therefore business uncertainty, is the new normal.

This macro-context presents GCs with a rare opportunity to step into the vacuum created by extremes. They should do so now, before the world returns to the old normal, as it inevitably will.

The current vacuum at the centre of the political spectrum allows the extremes of left and right to set the agenda. But the vacuum also allows hitherto unheard voices to be heard: #metoo, gender pay gap, gun control and other conduct and environmental, social and governance (ESG) issues are being addressed in a manner unthinkable in ‘normal’ times.

Ultimately, these conduct and ESG issues will come to haunt the boardroom, in one form or another.

And now the boardroom turns to lawyers for help, only to find that in-house and external law firms – themselves merely an extension of in-house, hence the name ‘in-house’ – are not in good shape to deal with these problems.

Why? Because ‘the Business’ has neglected Legal for years, and taken all the advantages of having ‘friendly cops’ on the inside without confronting its responsibility to create an environment in which Legal can do its best work.

If anyone doubts the abusive nature that is the Business-Legal relationship, they should read UCL’s Mapping the Moral Compass Report (June 2016) into the ethical pressure that businesses exert on in-house lawyers.