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April 2012: Time for Legal Counsel to Step Up to the Sustainability Plate

For two decades now, the ‘leadership case’ for sustainable business has been made in UN conferences, popular management books, scholarly articles and professional fora. Pretty well every executive function of the firm from CEO and CFO to Director of Operations and Director of Communications has been examined for ‘sustainability fit’ and the special contribution the role might make to the transformation of business in line with sustainability principles.

In a 2011 Financial Times article, Anthony Goodman even mused on the prospects for the new phenomenon of the ‘Chief Sustainability Officer’ becoming a stepping stone to the CEO job, such was the need for leadership skills, capacity for innovation and technical knowledge required by a CSO. So it is intriguing that in their current ‘Lessons from Leaders’ series examining the roles of ten C-suite players in sustainable business, Accenture completely overlooks one vital role from consideration – that of the General Legal Counsel.

In February this year the Chartered Institute of Personnel and Development published a series of think pieces on The Responsible and Sustainable Business: HR leading the way in an attempt to galvanise the HR profession into a more strategic contribution to the sustainability agenda. If sustainability is a complex and context-specific concept involving the interplay of organisational leaders, corporate values and employee belief systems, then the guardians of pay, performance and organizational development must surely be part of the transformation.

We should wish the CIPD well in their campaign because “look out, here comes HR” is another standing joke of corporate life, mischievously captured by Dilbert inventor Scott Adams in his character Catbert – the evil HR director.

So who is going to be brave enough to galvanize the legal profession and what would be the benefits?

Earlier this year I attended a private meeting of four general legal counsels representing very diverse corporations with the purpose of considering exactly these questions. The meeting was convened by Bond Pearce LLC, a leading UK law firm with a values-based interest in the topic.

Of course it is not difficult to interest lawyers in issues of immediate risk: legal compliance on Environment, Health and Safety, oversight of human rights standards in the supply chain, IP protection, due diligence during mergers and acquisitions, and the Bribery Act. But if the business case for sustainability is increasingly about new products, new markets and future uncertainties, what is the role of lawyers in helping companies navigate that terrain?

We found that there was a strong consensus – at least among our small sample of enlightened lawyers – that compliance is a given. The contribution which really should matter from a legal perspective involves issues of competitive strategy, enabling new market developments, balancing comparative ethical values (e.g. in diverse international markets), and reputation management).

Exploring a series of real life case studies from a forthcoming book (1) it was not difficult to see where an incisive legal mind could add enormous value. For example we considered the case of Nina (not her real name), who until recently worked for a global mining company. The company proclaimed publically that sustainable development was very important to them. However, it was increasingly clear to Nina that there were many internal barriers to incorporating sustainability principles into the business.

While some members of Nina’s company tried to change how the company built and operated mines to reflect basic social and environmental responsibility values, most held to traditional mining engineering assumptions. In Nina’s experience, the dominant mindset of her senior colleagues was to seek the highest rate of return with little regard for resolving issues in a ‘win win’ way. And so the company, its leaders and its workers appeared to her to be stuck in a constant identity crisis.

In her words, Nina’s work was eventually: “relegated to the metaphorical dark corner of the basement. Our work was not supported, recognized, nor communicated to key people because it was considered, by many managers, to be subversive to the company’s real goal – making money.”

It did not take our meeting with General Counsel very long to decide that in such situations, a proactive lawyer would very quickly identify the risks to corporate reputation from whistleblowers and local communities if such contradictions were not addressed. Access to mineral resources and project finance could vaporise very rapidly if such disconnects persisted, and so legal counsel must be ready to act as the ‘ethical conscience of the company’.

A suitably smart lawyer might work with her C-suite colleagues and the Human Resources function to help role model authentic and reflective leadership values and behaviours within the organization for the sanity of all internal and external stakeholders. And finally, a really forward thinking general counsel would be anticipating future legal and socio-political trends to help the company’s longer term resilience and competitiveness.

This article will appear in the forthcoming edition of Croner Environment.

Professor David Wheeler, Pro Vice-Chancellor (Sustainability) and Dean of Plymouth Business School (At time of writing)

(1) See Kurucz et al 2012. Reconstructing Value: Leadership skills for a sustainable world, University of Toronto Press.

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