Focus on…In-house counsel: the allrounder

Sustainability and ESG are prominently at the centre of strategic planning processes of corporations nowadays. Lawmakers’ efforts and market dynamics drive this trend, and social expectations of stakeholders are evolving into an organic element of value creation. ESG is increasingly becoming integral to corporate business models to meet investors, employees, suppliers, and customer expectations. As a result, in-house counsel are faced with the challenges of changing legal and regulatory frameworks and opportunities to demonstrate leadership and support their organisations through volatile times.

ESG covers a wide array of genuine responsibilities of in-house counsel. Contrary to the common perception, it does not affect only corporate governance areas such as, but not limited to, stakeholder engagement and dialogue, director obligations, or board structures. The ramifications for in-house counsel are even more tangible within their daily business, as the increasingly enhanced scope and complexity also affect contractual obligations, compliance and prevention, litigation risk, or directors and officers’ liability. Furthermore, corporate ESG programmes and the efforts to comply with said evolving legal and regulatory landscape lead to a change in corporate risk profiles. Established risk management models need to be revised to consider ESG-related exposure, disclosures, or promotion of specific initiatives on social media platforms.

Given that ESG is a relatively new trend, it is far from a standardised approach like compliance management programmes. However, there are indications of consolidation, harmonisation, and established best practices within the legal services industry. For the time being, ESG remains an asymmetric area for in-house counsel and their organisations, which requires a pragmatic and sensible approach to navigate between business needs, legal requirements, and risk mitigation. For multi-national corporations, it is an intense balancing act to implement a uniform ESG programme finetuned to the wide range of local legal and regulatory requirements at the same time, which eventually results in tailored ESG programmes, that strongly depends on factors like industry, corporate footprint, stakeholder requirements, public pressure, and appetite for self-commitment.

Regardless of the individual corporate ESG profile, the ramification for in-house counsel roles is continuously progressing towards a generalist approach, as they are increasingly required to have a robust understanding and familiarity with a multitude of disciplines and a broad scope to be able to provide advice in support of cross-functional efforts of their organisations.

Shahin Timdarazar joined GKN Automotive as general counsel Europe, in 2019. He is a business-focused legal and compliance executive with experience managing corporate, commercial and compliance matters, dispute resolution and litigation, strategic and post-merger integration, and transformation projects.