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Cover market disclosure in 2005, which has empowered to “understand the makeup of the board and the investors to hold issuers responsible for the accu- issues well enough to give them what they need — racy and completeness of financial statements and and not more than that,” says Mark Van de Veen, press releases, has focused everyone’s minds, he chairman of the Association of General Counsel of explains. “The only change is that the conse- Alberta and former in-house counsel with Cenovus quences of getting it wrong are now much worse.” Energy Inc. in Calgary. The state of the economy has something to do with that.“When companies were doing well and The heart of the matter the numbers were strong, directors were not asking Ultimately, it’s about getting to the heart of legal the tough questions, they were very complacent,” risks involved with any given situation. “I’ve says Alexander. “Now, they’re very aggressive and found that the role of corporate counsel is to want lots of information.” identify and articulate the risks,” saysVan deVeen. And with the change of corporate counsel’s role “If you don’t communicate the legal risks and the over this past decade to being strategic advisers board makes a decision without understanding who must ensure their companies obey far-reach- them, it can get into trouble.” ing and complicated regulations, it’s falling on in- Doing that effectively,however,can be challeng- house lawyers to ensure that the boards of directors ing. Generally, board meetings take place one day get the information they need. per quarter; during that time, members of the management team will also be making presenta- Goldilocks communication tions that require the board’s time and attention. Communicating with directors requires the ability So, during the limited amount of time you have to draw their attention to the most pressing issues you need to present “information that is timely in a very limited timeframe.It’s important not only and useful; you can’t give them everything,” says to understand and avoid common mistakes, but Jussup. “Take only important information that is also to use strategies that get the message across relevant to what they’re doing. You don’t bring clearly and fully so that the boards are well pre- stuff to them that won’t meet a certain threshold.” pared and steer clear of any harmful consequences. The focus must be on what Creighton calls Getting the information boards of directors need “exception-based reporting,” which centres on involves thinking like Goldilocks:You need to get unique and important developments.“Board days it just right.The most common mistake is provid- are really crowded and keeping on time is critical, ing information “that is either too wordy with too so you need to have a presentation where you’re much jargon, or not there’s not enough, without primarily describing exceptions and how they’re context;both are just as bad,”says John Jussup,gen- being dealt with,” he says. “On premise, you’re eral counsel and corporate secretary with the Bank taking anything that can garner the regulators’ of Canada in Ottawa. attention, or external attention from clients and Brad Allen, senior vice-president of shareholder the press.” communication and corporate governance adviso- When presenting the information, get right to ry firm Laurel Hill Advisory Group in Toronto, the heart of the matter.“Don’t just dump a docu- would know. The issues he deals with most are ment on the board,” says Jussup.“Include a memo- when “things tend to go off the rails” — and one randum with three pages’ worth of highlights that of the most common reasons why that happens is is timely, relevant and gets to the point. The last that “boards don’t seem to be well equipped with thing the directors need is legal gobbledygook.” the information they need,” he says. “The boards “You need to distil a 500-page document into are unprepared and don’t realize what key stake- its essence,” says Alexander. “Be concise. Distil holders are thinking — that’s when you see boards what you have and put it into a presentable form. get into trouble.For whatever reason,they’re either Where corporate counsel fall down is when they not getting the right information, or the right talk too much about detail [rather] than the over- information is not being delivered properly.” all risks and liabilities.” BRYAN LOCKYER So,how does one get it just right? First,it’s crucial This doesn’t mean that you can’t provide more 22 CCCA Canadian Corporate Counsel Association FALL 2011