Why is the general counsel the “guardian of the company’s reputation and integrity”?

In a recent article, Scott Giordano of Mitratech credited Ben Heineman (General Electric’s former general counsel) with an observation he and others must believe to be profound. “The greatest challenge for the GC is to reconcile the dual and sometimes contradictory role of being a partner to the business and a guardian of its reputation and integrity.” This appears in Met. Corp. Counsel, June 2011 at 9. My question is, Why single out the top lawyer as a guardian of reputation and integrity, as if that lawyer has more of a moral guardian role than do other top executives?

Later, Giordano cites the cop on the beat obligation. He writes “There is a conflict, for example, when the GC’s compensation package is tied to company profitability and stock options. It raises questions of impartiality when there is a personal incentive to disregard playing the corporate cop and maximize payouts that might be a result of manipulated financial numbers.” The top lawyer not only cleanses moral turpitude and preserves the good name of the company, but walks the beat and swings the billy club. Why the heightened ethical burden on lawyers (See my post of Dec. 22, 2005: ethics with 5 references; Oct. 7, 2008: ethics with 29 references; March 11, 2010: ethical behavior and in-house lawyers with 15 references.)?

It must be flattering to view oneself as the bulwark against lapses: the purer-than-thou lawyer calling ethical balls and strikes. But that could be myth-making and self-aggrandizement. Everyone in a company ought to be concerned about the public perception of that company – its brand and reputation – and everyone in a company ought to act honorably – show integrity.

IT professionals don’t want data breaches, server failures, and flawed software. They are guardians of important parts of a company’s reputation and integrity. The CFO certainly tries to avoid violations of GAAP or rules of exchanges, and certainly doesn’t want embarrassing restatements or disclosures. Do CPA’s ignore corporate reputation and integrity? Human Resources staff care deeply about whether employees admire the company they work for and whether it treats employees with dignity and respect.

Why are lawyers placed on the pinnacle of punctiliousness? The crackerjack tax lawyers at GE have done their job so well that GE has been under the glare of publicity for paying such a low corporate tax rate. Is that reputation building? Can legal guns be paragons of morality and good behavior?

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