May 29, 2015
By Robert Barker
Given the growing influence and value which General Counsel bring to the C-Suite, companies increasingly recognize the importance of succession planning for this key role, according to the results of an exclusive survey conducted by BarkerGilmore and NYSE Governance Services.
The study, “GCs: Adding Value to the C-Suite,” sought the opinions of CEOs and directors of publicly traded companies.
Its findings underscore the changing and evolving perceptions of the role of General Counsel and the escalating awareness that this trusted advisor is critical to corporate operations.
This has placed added pressure on executives and hiring managers to design and implement a formal succession plan for the General Counsel.
Here are three key takeaways from the study which we believe will have the greatest impact on business leaders as they prepare to identify and groom General Counsel successor candidates:
86 Percent of CEOs and Directors Surveyed Value Succession Planning
While GCs have historically exhibited long tenures in their assignments, turnover in this position is becoming increasingly common as companies are offering lucrative compensation packages to lure away strong performers.
Additionally, GCs are becoming more comfortable with their investment portfolios than they were at the peak of the recession, giving them greater incentive to consider retirement.
Given these factors, 86 percent of the company leaders we surveyed believe that having a regularly reviewed and flexible succession plan is important.
Only 40 Percent of Companies Surveyed Have a Formal GC Succession Plan
Companies realize that the departure of the General Counsel, whether planned or unexpected, exposes them to a myriad of potential legal, financial, and reputational risks. These possible risks are generating additional pressure for executives to prepare accordingly.
However, the study found that only 40 percent of the companies surveyed do, in fact, have a formal succession plan in place for the General Counsel.
Identifying and developing top internal candidates with the leadership potential to become the next GC successor should be an ongoing effort that is integrated into companies’ strategic plans. The current General Counsel owns responsibility in this endeavor and should take the time to regularly review and coach top internal talent.
90 Percent of CEOs and Directors Surveyed Valued Benchmarking
As General Counsel and executives consider potential GC successors, it has become expected to compare strong internal candidates against top external talent. In fact, 90 percent of the board members and CEOs we surveyed said that they believe benchmarking is important.
Benchmarking adds rigor to the assessment process and ensures companies hire the best talent on the market.
As companies have become more aware of the value which GCs bring to company strategy, shareholder engagement, and other areas, they are devoting more resources to identify and evaluate candidates. As the business regulatory environment evolves and competition in the market increases, we expect these trends to continue in the coming years.
For more insights on General Counsel succession planning practices and the areas of expertise which executives desire most from their GCs, download the full study.
About the Author
Robert Barker is Managing Partner of BarkerGilmore, a team of national legal recruiters known for placing General Counsel and Chief Compliance Officer candidates of the highest caliber. If you have questions concerning General Counsel succession planning or would like to share your experiences to add to our findings, please contact email him or visit his BarkerGilmore’s website.