The risk-reward conundrum

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A GC’s ability to play a lawyer-guardian type role in a company is critical, writes Neeta Sanghavi

The purpose of corporate governance is to facilitate effective entrepreneurial and prudent management that can deliver the long-term success of a company. Under Basel requirements, corporate governance should be an independent function so that it works fearlessly and independently.

A company’s integrity and its business reputation are critical in today’s global business environment, and the general counsel is in precisely the right position to assure that the board recognizes this and acts accordingly. Playing a proactive role to encourage a corporate culture of ethical behaviour and compliance is of paramount importance.

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Neeta Sanghvi

In this context, the co-operation and influence of the GC vis-a-vis the board of directors often gets less attention than it should. But this relationship is more relevant than ever due to growing requirements in surveillance and guidance of core business activities and strategic direction, as well as their deeper involvement in key topics like audit and compliance, nomination and remuneration of executive management, and social responsibility. Besides offering legal expertise and advising on risk exposure, liability, compliance and governance, the GCs take a broader view that encompasses the company’s reputation and integrity.

The ideal modern GC should be a lawyer-guardian who is an astute lawyer, a wise counsellor and company leader who plays a major role in assisting the corporation achieve that amalgamation of ethical values and integrity, which should be the foundation of global capitalism.

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Neeta Sanghavi is general counsel of the Avendus Group. The views expressed in this article are personal