What is important to GCs

We listed various responsibilities and asked GCs which were important parts of their role.

Their responses showed a wide range of involvement in key corporate activity – more so, in some areas, than we have seen in other parts of the world.

For example, strategic business planning is very important or essential for 77% of our Latin American GCs, as opposed to 45% of the GCs we recently surveyed in Singapore and 46% of those we surveyed a few years ago in the UK.

Conversely, legal solutions for common commercial issues are very important or essential for only 69% of our Latin American GCs, as opposed to 80% in Singapore and 81% in the UK.

In other cases, the numbers are more similar e.g. the negotiation of significant contracts and deals is very important or essential for 85% of the Latin American GCs we surveyed, 81% of the UK GCs and 80% of the Singapore GCs.

Some of these differences may reflect sectoral differences between the regions (e.g. over a quarter of the Latin American GCs we surveyed work in Oil & Gas or the extractive industries – a proportion far greater than in the UK or Singapore). But it also appears to be the case that the Latin American GCs we surveyed are – on average – operating at a more senior level. To some extent this may reflect the proportion who work for large international companies. It is a topic we will return to below, when discussing the GC Value Pyramid.

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

Ethics and compliance

When they write an agreement, they shape conduct. When they perform an ethics role, they shape conduct within the organisation. When they do compliance work, they shape conduct. That’s all we do, day in, day out. Nothing else.
Gonzalo Smith Ferrer, Falabella SA

 

By far the most striking result shown in our chart is the 92% of Latin American GCs for whom ethics and compliance are very important or essential. This is a number significantly in excess of what we have found elsewhere. And if we look at the number (77%) of Latin American GCs for whom this is essential, it is clearly the most ‘collectively essential’ area by a very wide margin (being followed in second place by risk management on 49%).

This may reflect both major corporate governance scandals in the region, such as the Panama Papers and Operation Car Wash, and recent anti-corruption drives in countries as diverse as Costa Rica and Peru. And, once again, it may partly be due to the proportion of GCs who work in major international businesses.

Whatever the drivers for it, though, it is of a piece with the greater emphasis on ethics and compliance that we have been seeing around the world in recent years – initially with a growth in compliance requirements in the wake of events such as the introduction of Sarbanes-Oxley and, in particular, the global financial crash of 2008, but also in more recent years with an increasing focus on ethics.

For some commentators, the increase in compliance requirements has been the principal driver behind the massive growth in the international in-house legal profession in recent years, as well as the increasing status of many GCs, and their expanding roles and responsibilities. (Only 17% of the GCs in our survey had not assumed additional responsibilities since taking up their current post, and in many cases those new responsibilities relate to regulatory matters and compliance.) The current stronger emphasis on ethical scrutiny can only continue that trend.