Global crosswinds and active stakeholder engagement require heightened GC attention in 2023
Lex Mundi has identified how global crosswinds are impacting stakeholder governance and the role of the General Counsel (GC). This year’s Lex Mundi GC Summit, held in Munich in September, brought together senior in-house counsel from over 30 blue-chip companies around the world to discuss the fallout from global crosswinds, such as the global economic downturn, geopolitical conflicts, and the energy crisis. The subsequent report released today finds that the new paradigm of stakeholder governance is fundamentally transforming the GC role.
The Lex Mundi GC Summit Report 2023 titled “Global Crosswinds, Stakeholderism and General Counsel” (‘the Report’) builds on findings from last year’s report – which identified and defined the emergence of the stakeholder governance paradigm as an evolution of traditional corporate governance. It concludes that the shifting landscape of stakeholder pressure, in particular the tilt toward sharper regulatory action, necessitates a step-change in risk management, stakeholder diligence and qualitative horizon scanning. Some of the key themes discussed are: GCs will need to get to grips with a perfect storm of negotiating lender KPIs and regulations that target carbon emissions against the backdrop of rising borrowing and energy costs. Across different stakeholder groups examined in the Report, some countervailing trends are surfacing, the exception being regulation which has become both more expansive and defined to include the ‘unwritten rule of law’. The combination of global crosswinds, stakeholderism and regulation are causing some GCs to sharpen their focus on bridging external and internal constituencies.
The Report concludes with advice for GCs on how to manage the evolving stakeholder agenda during current global crosswinds, and how to help their companies navigate a myriad of competing stakeholder demands.
Eric Staal, vice president (global markets) at Lex Mundi, “The stakeholder governance paradigm is showing impressive durability against strong global crosswinds in terms of markets, geopolitics, and the energy transition. Although 2022 has been marked by countervailing trends reflected in the governance data and a wave of substantive criticisms, it is new regulatory action from central banks, governments, and courts that stands out most as reinforcing the stakeholder agenda. The broad range of regulation that is starting to come into force is requiring more GC attention and smarter on the ground intelligence.”
Helena Samaha, CEO and president of Lex Mundi, “Global events have redefined our understanding and sentiment towards ESG concepts and other emerging areas of regulation. These factors are impacting the stakeholder agenda at an accelerated rate and increasing pressure on in-house legal departments, many of which are reporting that they are reaching a breaking point in their ability to advise on regulatory compliance. At Lex Mundi we have been facilitating conversations about the role which GC have in managing stakeholder relations in this new landscape.”
