Page 6 - CCCA Magazine Fall 2019

{ LEGAL PERFORMAnCE }

A mile Wide but hoW deep?

By Theodore Dela Avle, CIC.C

prior to and during law school, i never gave much thought to prove the company’s bottom line. We
corporate governance. even through my early years of practice play a vital role in helping managers and
the board assess risks and weigh them
in a law frm, my experience with corporate governance related against opportunities.
It can be difficult. Some situations
to those supporting board meetings of the organizations we that start out as business decisions
worked for or periodic flings with securities commissions. (how to characterize a certain spend or
loss) or even technical ones (whether a
problem can be engineered away) can
ith a few more years under my However, the life of in-house counsel eventually snowball beyond where they
belt and a larger proportion of my is indeed typically wide ranging and hard started and implicate potential breaches
Wcareer as in-house counsel, I now enough, even before adding on the key of the company’s own bylaws and poli-
understand that what constitutes corpo- role of ensuring your entity dispatches its cies or, worse, bring the spectre of exter-
rate governance is far broader and more corporate governance obligations as re- nal sanctions or criminality.
complex than I had imagined, and ensur- quired. With several matters on the go, it To help our companies discharge their
ing our companies properly exercise their can be diffcult to provide the right level corporate governance obligations effec-
corporate governance obligations is a key of focus on the key role of gatekeeper to tively, we need a thorough understand-
part of the practice for many of us. ensure the company carries out its corpo- ing of the business of our entity (includ-
While a company’s board of directors rate governance obligations. ing both the commercial bases and the
is the primary force infuencing corporate That being said, as in-house counsel, technical underpinnings of our products
governance, in-house counsel have a key we are particularly suited to be the gate- or services) and the industry or indus-
role in ensuring the board can perform keepers in the discharge of corporate gov- tries it participates in, and apply our
its functions appropriately. Bad corpo- ernance obligations. We are (or should be) legal expertise based on these to ensure
rate governance has a negative effect not part of the inner circle of management, we are on the right side of corporate gov-
just on the organization (bad publicity, with access to the organization’s strategies ernance obligations. While being overly
a poor bottom line) but also on coun- and plans for implementing them. We are risk averse could be seen as obstruction-
sel: anything from being seen as derelict also subject to rules of professional con- ist, not addressing a clear issue head on
in discharging your duties to considered duct that require us to exercise our man- and deferring to others could have an
complicit in criminal activity and being date with integrity and a clear eye for the extremely deleterious effect on our orga-
actively charged is possible. bright line between healthy risk-taking nizations and ourselves.
I recall a news article about a U.S. Se- and behaviour subject to sanction. We Even if your practice is mile wide,
curities and Exchange Commission (SEC) are better placed than external counsel to when it comes to corporate governance,
case against an in-house counsel who al- appreciate the consequences of any deci- your depth of understanding of the key
legedly failed to provide important infor- sions the company takes. governance requirements that impinge on
mation to the audit committee, board of Yet, we also have peculiar challenges your entity, together with an equally in-
directors and external auditors that could to helping the organization navigate depth knowledge of your business, will be
have prevented a fraudulent fling. He was its corporate governance requirements. key to helping your organization success-
reported to have indicated in his defense For one, as an employee and business fully meet its obligations. ❚
that his practice was “a mile wide and an partner whose remuneration (even em-
inch deep,” so he had not appreciated the ployment) is tied to a large degree on
relative importance of the facts that had the success of that one entity, we have Theodore Dela Avle is Senior Legal Counsel at
Bruce Power, where he strives to be a mile deep in
led to the case. As I recall, the SEC gave to support decisions that may have an corporate governance matters at all times. Reach
short shrift to that line of defense. element of business risk but could im- him at dela.avle@brucepower.com.

6 CCCA MAgAzine | fALL 2019 AUToMne