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The impact of corporate politics on in-house legal counsel

Robert Botha

Robert Botha

9th June 2023

     

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This article has been supplied by the author and has not been written or solicited by Creamer Media. It may be available only for a limited time on this website.

Corporate politics, the intricate web of power dynamics, alliances and manoeuvring within organisations, has far-reaching consequences on various stakeholders. In-house legal counsel, responsible for navigating the legal landscape, are not immune to these dynamics. In this article we will look at how corporate politics influence the role and effectiveness of in-house legal counsel.

Corporate politics often create an environment where in-house legal counsel face challenges in maintaining their independence and objectivity. As they become involved in internal power struggles and conflict, their ability to provide unbiased advice can be compromised. Legal decisions may be influenced by personal loyalties (meeting key performance areas (KPA’s)) or pressures from influential stakeholders, undermining the integrity of legal advice and jeopardising the organisation’s compliance, reputation and shareholders insight into the true legal landscape of the organisation.

In-house legal play a crucial role in advising on strategic decisions, agreements and risk management. However, in politically-charged environments, decisions may be driven by personal agendas (again meeting KPA’s plays a big role) or expediency rather than sound legal judgement. Legal counsel may find themselves excluded from key discussions or pressured to align with certain positions, hindering their ability to provide accurate and comprehensive guidance, again to the detriment of the company and its shareholders.

Corporate politics can erode ethical standards, creating situations where legal counsel are expected to compromise their professional integrity. They may face pressure to bend or interpret laws and regulations to favour others interests and hidden agendas. This severely hinders their ability to uphold legal and ethical standards, potentially exposing the company to legal and reputational damage.

In-house legal counsel rely on their credibility and influence to ensure their advice is heeded. However, corporate politics can marginalise their role and reduce their effectiveness, as well as have a debilitating effect on their morale and that of their team. When legal counsel is perceived as part of a particular faction (including within their team), their advice and standing within their team may be disregarded or undervalued, leading to suboptimal decision-making and increased legal exposure for the company.

Navigating corporate politics becomes essential for the career advancement of in-house legal counsel. Building alliances, cultivating relationships and aligning with influential stakeholders may be necessary to gain visibility (“selling your soul’’) and to secure promotions. This diversion of focus from purely legal issues can create tensions between personal aspirations and the company’s best interests.

Despite the challenges, there are steps that can be taken to mitigate the impact of corporate politics on in-house legal counsel. Developing and maintaining strong ethical standards, fostering open communication, and cultivating relationships based on trust can help legal counsel navigate the political landscape while upholding their professional integrity to be the authentic leader.

Corporate politics has a significant impact on in-house legal counsel, affecting their independence, decision-making processes, ethical standards and overall effectiveness. Companies must recognise the potential pitfalls and take proactive measures to ensure that their legal teams can operate with integrity, objectivity and influence, thereby safeguarding the company’s legal risk, compliance and reputation.

A daunting task indeed.

Robert Botha is a founding member of INMISO CONSULTING and has over 25 years’ working experience in the commercial legal environment. As part of the INMISO team, he represents a strong basis of experience and achievement in using the law to protect and advance the interests of blue-chip corporations at the highest level and in building and managing high-performance, technically superior legal teams. Other areas of expertise include management of legal operations, risk management and compliance, commercial mining law, arbitration (local and international), labour law (including retrenchment negotiation and process) as well as legal project management skills.

Prior to his appointment at INMISO, Robert held a number of key legal and commercial positions including Business Development and Client Relationship Consultant at Hogan Lovells SA, Deputy Head of Legal at Anglo American, Head of Legal at Kumba Iron Ore and Legal Manager at Deloitte.  Robert holds a BComm Law and BProc degree from the University of Pretoria and was admitted as an Attorney of the High Court of South Africa in 1995. He furthered his education by obtaining an Advanced Diploma in Labour Law from the University of Johannesburg in 1999 and completing the Anglo American Management Development Programme at the University of Stellenbosch in 2007.

Edited by Creamer Media Reporter

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