Basic HTML Version
86
|
GC
| WWW.GCMAGAZINE.COM
policies nor unambiguous reporting lines for
serious corporate misconduct issues. The in-
house lawyer as the custodian of legal propriety
walks an increasingly wobbly tightrope in
representing the company’s business interests
whilst upholding what is right and fair.
We examine the dilemmas facing in-house
lawyers, speaking to those who have dealt with
whistleblowers and those who took the plunge
and became whistleblowers themselves.
WHERE DO YOUR LOYALTIES LIE?
So are GCs continuing to struggle with the
burden of being perceived as a business
blocker by the board? John Flood, professor
of international law and business at the UCD
Sutherland School of Law, Dublin says central
to the GC ethics debate is the issue of job
evolution: the role of a GC is a lot more complex
than it once was. Previous GC bread-and butter
issues - employment, immigration, M&A - are
now increasingly overlaid with a multitude of
other pressures and demands. ‘It’s increasingly
about being more business minded and dealing
with compliance,’ he says. ‘The in-house legal
department has historically been seen as an
overhead, a cost. Now there is a burden to
become value creators.’
But at the heart of the GC job is negotiating a
course of action when things go wrong. Call
it risk management, or making sure the right
processes or lines of action are followed when
trouble looms, but much more is required than
merely calibrating a situation ‘high’ or ‘low’ risk.
Perhaps one of the biggest questions of all for
a GC is who is the client? Is it the company or
CEO, the board, employees - or shareholders?
‘You may find that some [parties] could be
the client and not be the client,’ Flood says.
‘Imagine if the CEO comes to the GC and says:
“Something is going wrong, what can we do?”
and the GC says: “Let me think about it”. The
in-house counsel almost has a split duty. The
CEO may become a liability at that point and the
general counsel may no longer be able to work
with them, telling them they need independent
representation.’
Sometimes the duty is not to any client but
to the state. Rewind just back to September
this year when the UK High Court found
ex-Times and News International lawyer Alastair
Brett had behaved recklessly when his paper
resisted an injunction to protect the identity
of anonymous police blogger Nightjack. It
was subsequently revealed a Times reporter
had hacked the blogger’s email account.
Why relevant? Because it underlines the
need for in-house lawyers to remember duty
to a court must trump loyalty to a client.
And for many in-house lawyers this principle
remains clear cut.
One senior in-house counsel at a European
bank remarked that ‘whichever way you look
at it, the role of the in-house lawyer is not to
brush things under the carpet. The lawyer,
in whatever context, is first and foremost
an officer of the court and that brings
obligations.’ And those obligations extend
to whistleblowing, he continues. ‘If someone
brings you something that looks credible you
should look into it.’
This is being taken on board in some companies,
where GCs and in-house lawyers are training
the business about their role and professional
obligations – and why ‘a company conscience
makes for good business.’ So says one former
GC. ‘There is something an in-house lawyer can
never lose sight of. It’s a comment I read once
from a leading GC that went something along
the lines of – “a nay-sayer may not get a seat