Due North: Being the Moral Compass for Your Corporation

How can in-house counsel balance their moral and legal obligations as the voice of reason for their corporations?

All in-house legal counsel wear many hats – it’s par for the course in return for the reward of a varied legal role and the chance to play an integral part in a thriving business.

However, as legal transactions become more complex and regulated, one of those hats is clearly labelled ‘moral conscience of the company’. So how can corporate counsel espouse ethical outcomes while pursuing business objectives and watching the bottom line?

Beyond the black letter of the law

In March 2015, during a keynote address at the Australian Corporate Lawyers Association’s Corporate Counsel Day, Professor Gillian Triggs declared that the role of in-house corporate counsel has evolved to include ethical considerations, as well as strict legal functions.

“In-house counsel have a wider role,” Professor Triggs said. “They have a duty to their client and their company, but it is a duty trumped always by the higher duty of the rule of law and to act in an ethical way,”

Sounds pretty intense, right? Well, as the right-hand man or woman of the company’s CEO, that’s the level you need to play at to perform the role well while adhering to your professional standards.

Triggs urged corporate counsel to “go beyond the black letter of the law” and confirmed that counsel needs to play “a strong and necessary independent role, like a moral compass guiding the institution towards ethical behaviour along with wealth creation for shareholders.”

What exactly does ‘ethics’ mean for in-house players and how do you walk that very fine line?

The ethical tightrope

Let’s first remember that law is never practised in a moral vacuum, and corporate counsel are no different to any other kind of practitioner.

Sir Gerard Brennan once said that ethics cannot be reduced to rules: “Ethics are not what the [lawyer] knows he or she should do; ethics are what the [lawyer] does. They are not so much learned as lived. Ethics are the hallmark of a profession, imposing obligations more exacting than any imposed by law and incapable of adequate enforcement by legal process. If ethics were reduced merely to rules, a spiritless compliance would soon be replaced by skillful evasion.” (Bar Association of Queensland, CLE Lectures, 3 May 1992)

However, it can be hard to manage these ethical responsibilities while also helping to grow your business and avoid the quagmire of strict laws, regulations and red tape. The recent spate of Royal Commissions and ICAC inquiries have revealed that it’s imperative for lawyers to practise law with a sense of moral fortitude.

So what do you need to consider in order to act as the ‘moral compass’ of your company?

Critical considerations

The Queensland Law Society has identified three critical questions a lawyer should ask when considering how ethics play a part in their overall function:

  • Do my actions serve the administration of justice and uphold the rule of law?
  • Do my actions encourage public confidence in the administration of justice and in the legal profession?
  • Do my actions serve the best interests of my client?

In-house corporate counsel, just like lawyers in private practice or government, must consider that there are other stakeholders to take into account other than their ‘client’ i.e. the company, such as the court, community and colleagues in the profession.

And, even more importantly, the company’s CEO, senior management and the board are all relying on you as their advisor to ensure they do not get caught up in a moral or ethical scandal and end up on the wrong side of the law.

Top tips for corporate counsel

As corporate counsel, you may find yourself in a position where legal and ethical questions arise and you feel uncomfortable with your company’s approach to those issues.

Here are some handy tips to navigate those rocky waters, perform your legal functions and act as a moral gatekeeper:

  • Remain loyal to the company but speak up when you think there is a better, more ethical or legitimate path to achieving the company’s business goals.
  • Set up a solid compliance infrastructure and good corporate governance practices so that everyone can act within a tight framework when difficult issues arise.
  • Don’t be played by the company. Don’t let them use your legal skills to ‘work around’ a problem in an immoral or unethical way.

Rather than shy away from the tough decisions, take the opportunity to be a trusted legal, moral and corporate advisor and you’ll be an indispensable asset to your company.

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