March 16, 2017

general counsel risk risk management lawyers in-house lawyers legal department attorneys solicitors reputational risk reputation management

A recent poll uncovered the following regarding reputational risks: “the biggest risks to corporate reputation are intentional wrongdoing or illegal actions by corporate leaders (cited by 85% of Americans), lying or misinterpreting the facts about a product or service (83%) and intentional misuse of financial information for financial gain (82%). Other risks to reputation damage include security or data breaches (74%), unfair workplace conditions and culture (67%), workplace discrimination (65%), product recall due to contamination (65%) and poor leadership conduct (64%).”*

The matters on this list fall fairly and squarely within the remit of the in-house legal team which is why the General Counsel and legal department have a vital role to play in preventing and, should the worst happen, in managing the fallout from a reputation damaging event.

In-house legal departments vary hugely. Some are tiny (and size of team doesn’t always tie in with size of business) and, with a very small team, there’s unlikely to be the bandwidth for the GC to get on top of reputational risk fully. Other departments can be large in size but regarded in the business primarily as the doers of the legal work with the GC not a member of the board. In businesses with such legal departments, the GC may not have the authority to ensure reputational risk is handled well.

Of course the best businesses fully appreciate the need for the GC to be a full board member, a trusted business partner empowered and resourced to handle reputational risk management and wholly supported by the C-Suite in so doing.

However, if your organisation has a small legal team for the size of your business or if it tends to see the legal department mainly as doers of legal work, then I would think again about how to get the best out of the in-house legal resource available to you. Specifically I’d consider enhancing the role of the General Counsel’s team to encompass reputational risk management and fully support your GC in this development.

*http://www.theharrispoll.com/business/Corporate-Reputation-Politically-Polarized.html