4 ms·
For companies covered by Sarbanes-Oxley there are circumstances where the General Counsel is legally required to escalate an issue to the board of directors, or
by bradleyjg 13y ago
For companies covered by Sarbanes-Oxley there are circumstances where the General Counsel is legally required to escalate an issue to the board of directors, or a subcommittee of it. That's going to be difficult and awkward if he normally reports to the CEO. So while there are pros and cons to a plural versus unitary executive, at least for public companies, it makes a lot of sense to have the GC report to the board or a specific committee.
- deleted 13y ago[deleted]
- cperciva 13y agoSo while there are pros and cons to a plural versus unitary executive, at least for public companies, it makes a lot of sense to have the GC report to the board or a specific committee. Yes, I'd say that from a governance perspective the ideal situation is to have a GC or CLO reporting directly to the board. In startups the board doesn't necessarily do as much governing as they normally would, though, especially in the case of a founder-CEO; in such a case of a dysfunctional board, having the GC report to the actual nexus of decision-making (aka the CEO) might work better.