Could you share an example of a time when you came up with an innovation that improved how your legal team works and did not come at a large expense?

Liberty Group, headquartered in South Africa, is a pan-African company with a presence in over 20 African countries. We specialise in insurance, retirement funds, asset management, investments, property development, and healthcare.

We have also restructured the Legal team, which comprises over 35 diverse lawyers, into a centralised model consisting of Legal Business Partners. This restructuring aims to support various business areas, along with establishing Communities of Expertise in Dispute Resolution, Regulatory Affairs, Corporate Transactions, and Contracts. This has facilitated cross-functional collaboration, leading to robust cost savings within the legal department and positioning the legal team as a competitive advantage for the business. Additionally, we have significantly enhanced the value of the legal output, aligning it more effectively with the Group’s strategic priorities.

The legal heads of each area or function are also represented on key decision-making forums. The legal teams understand the difference between the legal profession and running a business, and that certainly assists in a deeper understanding of the business requirements, as well as ensuring added value.

From Gatekeeper to Ethics Officer – A Financial Services Industry Perspective

The global financial crisis, the tidal wave of regulation, rapid technological advances, and globalisation – fuelled by technology – have created a perfect storm requiring significant transformation of organisations. Their focus, which was on creating shareholder value, now needs to shift to a broader stakeholder focus. Sound corporate governance and ethical conduct have become the cornerstone of good corporate citizenship, now a board responsibility, through which companies justify their license to operate.

The perfect storm has led to a paradigmatic shift in the thinking and behaviour of many corporate functions, including the legal function. Higher ethical standards are now required by the legal fraternity, promoting a transparent, honest, and fair culture. The previous regime of unearthing loopholes in the law, relying on unfair but watertight contracts, hiding behind complex convoluted structures, and focusing solely on regulatory and legal exposures has led to unsustainable business outcomes.

Financial institutions are already experiencing more intensive and intrusive supervision, enhanced regulation, and wider supervisory powers, as is evident from the Financial Sector Regulation Act. This Act enabled the “Twin Peaks” model of regulation in South Africa, which is also supported by increased global cooperation among regulators. We have seen a shift from rule-based to principle-based regulation, which some might say creates more flexibility and decision-making power in the hands of financial institutions; however, “with great power comes great responsibility.”

Given the contemporary landscape of financial conglomerate supervision, characterised by onerous fit and proper standards for significant owners and key individuals representing financial institutions, in-house counsel should place a strong emphasis on ethical conduct and reputation management for their organisations. Especially in a time where the widespread and instantaneous reach of social media serves as a court of public opinion, overruling the traditional court of law, figuratively speaking.

Treating Customers Fairly (TCF) is no longer a nicety within financial institutions. An entirely separate regulator, the Financial Sector Conduct Authority, was established a few years ago in South Africa to address all market conduct issues facing financial institutions. The Conduct of Financial Institutions Bill (the COFI Bill), once enacted, will have far-reaching consequences for financial institutions in South Africa. The COFI Bill will have to be interpreted and applied in a manner that gives effect to its objectives, which, among other things, is to promote the fair treatment of financial customers by financial institutions. In some industries, like the insurance industry, TCF principles are already codified in the Policyholder Protection Rules, which underlie all client-related decisions made within a company.

The legal role has, therefore, evolved from a sole focus on regulatory and legal exposures with a tick-box mentality and strong reliance on the letter of the law to what is fair, just, and equitable. This evolution considers the values of a company, reputational considerations, and the spirit or intention of the law.
his transformation is also evident in the legal interpretation rules that our judiciary follows. Previously, there was a strict reliance on the literal meaning of the words in statutes or contracts, even if the outcome was unjust. Now, the approach has shifted unless the plain meaning of the word is ambiguous, vague, absurd, or misleading to fairness principles, “ubuntu,” understanding the context, the apparent purpose, and intention of the statute or legal provision.

As in-house counsel, there will, therefore, be a greater need to balance the company’s risk appetite with value-based judgments and ethical considerations to deliver sustainable outcomes for the business.