The Strategic Business Counsel: The ‘8C’ Model

What is the ideal twenty-first century GC like? We believe the best term for them is ‘strategic business counsel’. Over the following pages we set out a model which attempts to visualise the factors that combine to make strategic business counsel capable of operating at the highest level within their organisation.

Our model has been developed through hundreds of conversations with GCs in a wide variety of jurisdictions. Some parts of it may resonate with you more than others. It would be wrong to underestimate the impact of local conditions, just as particular employers, and the characters of GCs themselves, can lead to very different situations. Nevertheless, we believe that – as our several results show – GCs around the world have a great deal in common, and that each of the ‘8Cs’ in the model is an important aspect of strategic business counsel life for the vast majority of them.

In each case, we’ve tried to explain what’s significant for the GC and to follow our explanation with some thought-provoking questions.

Some of our previous GC reports have included tools for GCs seeking to improve aspects of their performance. This is not a tool as such, but we hope it will help GCs who are thinking about what they do and how they do it.

One challenge is that some of these areas are more within the GC’s control than others. In some cases, the biggest difficulty for the GC may be finding the right modus operandi to achieve both the company’s goals and their own.

Our model shows what helps a GC to move up the Value Pyramid. A GC who scores highly in this model while being on a low level of the GC pyramid – or who judges themselves to be at the top of the pyramid but is a low achiever in terms of the 8C model – will want to think about the reasons for that disconnect. Are they in the wrong role? Is their opinion of themselves not matched by what others think? Or have they so far succeeded while maintaining a narrow focus – and, if so, do they now have an opportunity to spread their wings?

We know that not all GCs face the same problems and challenges – although most of the GCs who have seen this model, or earlier versions of it, have been enthusiastic. But we hope our ‘8Cs’ will, at the very least, provide the material for some fruitful reflection and discussion

Key contacts

Contact
Felipe Arze Abogado Corporativo
Luis Felipe Arze, LL.M
Partner
T +56 22 4852 073
Jonathan Warne
Jonathan Warne
Partner
T +44 20 7524 6130

Culture

As well as legal risk, a company faces reputational risk every day, in areas ranging from employee engagement and social responsibility, through tax planning and financial management, to supply chain issues and environmental impact. The larger and more international the company, the greater the potential pitfalls and problems appear to be. Priorities may be slightly different in less high-profile companies – but even there, reputational damage can easily lead to a loss of business, while other behaviours may lead to fines, disbarment or even jail.

Companies have rules to deal with these things (and the GC should make sure they’re as good as possible), but no rule-based system will ever be able to de-risk every aspect of corporate activity. Ultimately, while good corporate governance may be based in codes and committees, it cannot depend on them. Instead, it has to rely on its corporate culture. A company needs a culture in which its staff are aware of ethical hazards and exercise good judgement in avoiding them – with a GC taking the lead in fostering that awareness and developing that judgement.

Carlos Hernan Paz Moquera at Riopaila Castilla asserts that: "Without a culture of ethics you have nothing."

Culture is an area where the GC should be front and centre. It works in different ways in different organisations – public companies, private companies, family companies, charities – but there’s no organisation that doesn’t have its own culture, and that culture is an important determinant of whether it succeeds or fails. In the phrase famously attributed to Peter Drucker, ‘culture eats strategy for breakfast’.

There is no ‘approved’ textbook method for a GC to drive an organisation’s culture. Part of the challenge for each GC is working out the best way to do it. But a good GC in a good company will be able to harness plenty of c-level support and will be able to draw on a range of resources and strategies to succeed.

Questions

  • How would you describe your corporate culture?
  • Is it appropriate?
  • Does your company have sub-cultures (in the boardroom, in departments, in foreign offices)?
  • Do you currently seek to influence corporate culture? Are you effective? How do you know?
  • Can you raise difficult issues at the board level without losing the support of management in
    other areas?
  • Have you got an agreed strategy or programme
    for corporate culture?
  • If this isn’t part of your role at the moment,
    how can you make it so?