General counsel: The silent force

GCs’ contributions can’t be measured in numbers but they enable a company to achieve its aims, writes Nitin Mittal

“The more efficient a force is, the more silent and the more subtle it is.” – Mahatma Gandhi

General counsel (GCs) are part of the leadership team of a company who primarily manage legal, ethical and compliance risks and simultaneously create opportunities for the business. However, they do so in an understated, silent and proactive manner without coming into the limelight, be it a major M&A deal, private equity investment or a regulatory issue. The GC’s contribution cannot be measured in terms of sales numbers, profit margins or cash flow generation, but their timely actions enable the company to achieve its objectives and preserve values. In my view, a GC makes unmatchable and significant contributions to ensure the overall well-being of the organization, and this, among other aspects, is achieved by multi-tasking and wearing various hats in the organization.

The wheels of business are continuously turning and to take the analogy of a race car, GCs are the persons who ensure that the business reaches its destination within the desired time without any legal/regulatory issues or hiccups. They do so with an eye on potential threats and challenges that the organization could face, and accordingly prepare a roadmap to mitigate risk. At the same time, they have an eye on all the indicators – just as a race driver would scan his car’s dashboard – which demonstrates good processes and legal compliance that GCs have embedded in their company’s DNA.

An important part of the counsel’s work covers contracts, which form the backbone of any commercial transaction. GCs structure contracts, mostly complex in nature, in a way that limits all kinds of potential liabilities, be they indemnities, liquidated damages or penalties, and other risks. They do so by clearly outlining the unequivocal scope of the contract to obviate multiple interpretations and any potential challenge. All in all, GCs safeguard the company from any potential risk and in doing so they maintain the business prospects of the company. This ensures that the organization is able to drive sales, maximize profit and minimize risk in case of disputes. Due to the nature of complex contracting provisions, the role of GCs may not be recognized until a situation arises where the terms of the contract need to be interpreted, much less, exposed to a situation where an opportunistic interpretation is sought on the basis the legal tenacity.

Nitin Mittal is the head of legal/compliance and company secretary at Philips Lighting India Limited. The views expressed are personal.