The Expanding Compliance Mandate of the General Counsel

Whereas once, a General Counsel (GC) was seen solely as the legal gatekeeper for the organisation, today the role is broader and more complex. When a company undertakes an IPO, it acquires a significant regulatory burden and the necessity to ensure the good name of the business is maintained in the markets. The GC is key to not only maintaining compliance but also reinforcing the trust of regulators, investors and analysts in the issuer.  

The GC is a strategic leader, tasked with embedding a compliance culture across the organisation, anticipating regulatory change and advising the board on reputational and operational risk. Heading the legal department, General Counsels work with IR and finance to meet the company’s obligations in a complex world and under the scrutiny of multiple stakeholders.  

This article explores the challenges that General Counsels face in this modern landscape, the risks inherent in the roles and how legal teams are developing and strategising to succeed.  

GCs and legal departments face a range of compliance obligations, including:  

• Interpreting and applying the requirements of the Market Abuse Regulation, including the management of inside information and insider lists to prevent insider trading 

• Meeting the provisions of the Transparency Directive with regard to reporting financial information, disclosing major shareholding notifications, storing communications and more 

• Adhering to national listing laws, including who to report to in each member state and how 

• Maintaining the company’s internal governance policies to ensure that it meets requirements in the correct manner.  

With the legal department often acting as the final line of defence before financial information goes public, it is essential to coordinate with IR, finance and communications to ensure that disclosures are accurate and that everything is synchronised to release at the same time to all stakeholders.  

2. The General Counsel’s growing challenges   

Carrying out the GC’s duties is not straightforward. There are numerous obstacles that you need to overcome to ensure the compliance of the business in today’s landscape.

• Last-minute access to prospective disclosures leaves only a tight timeframe to ensure they are legally sound before they have to be released. 

• Timing the release to ensure it occurs when the market is closed or just before it opens. This requires coordination to bring all the relevant elements together from different departments outside of normal working hours.   

• Manual, email-based workflows for reviewing sensitive content increase the risk of leaks, delay and oversights as details get lost in long chains.  

• Audit trail issues surface as you seek out timestamps and proof of action from across siloed tools during regulatory reviews. 

• Insider list compliance also enters the picture. From ensuring that all insiders understand their obligations and creating lists in accordance with the required standards to maintaining strict version control and compliant timestamping, it is all a significant amount of work.  

These issues can lead to compliance failures, due to rushed processes and unclear ownership of workflows in fragmented teams. The pressure of earnings season can expose this risk as you carry out multiple high-risk activities in tight windows ahead of deadlines, with the potential to send out inaccurate material by accident. 

3. How to rethink the legal team’s processes 

The “review at the end” approach is no longer fit for purpose, as it leaves little room for thorough review before you need to issue disclosures. Instead, you should embed oversight into the entire disclosure process, working together with other departments to maintain the necessary standards at each stage of the workflow.  

You can drive this by shifting from isolated tools, such as email, Word documents and Excel spreadsheets for insider lists to integrated platforms on which you can collaborate and which track and timestamp, keeping your sensitive information in one place for added security.  

These single source of truth systems make auditing much more straightforward and allow a cohesive approach to compliance whilst streamlining the process and making it more efficient. There is now no need to review each document individually because compliance is built into the system, making the company proactive, rather than reactive, when it comes to meeting regulatory requirements.  

You gain real-time visibility over the operation which enables the GC to focus on high-level risk, knowing that there is a strong compliance framework in place.

4. Compliance solutions for General Counsels 

Euronext Corporate Solutions provides a suite of tools that help General Counsels ensure compliance with listing requirements. These platforms will support you to meet your regulatory obligations: 

• EuroStockNews, to streamline the drafting and distribution of both regulatory and non-regulatory disclosures to all necessary bodies and outlets. 

• IntegrityLog, creating a secure and confidential whistleblowing channel to encourage internal stakeholders to alert the company to noncompliant behaviour before it becomes endemic. 

• LEI Services, ensuring you meet regulatory requirements for financial transactions in more than 90 jurisdictions with our GLEIF-accredited service. 

• InsiderLog, which offers streamlined insider list creation and management in a MAR-compliant manner.  
• Compliance certification programme to upskill your team and ensure compliance excellence with a thorough approach to understanding the current regulatory framework.  

Request a demo today to see how our solutions allow you to create a proactive approach to compliance.  

5. Conclusion

In a volatile market, with increasing regulatory pressure, the General Counsel shows their true value by implementing confident compliance. To achieve this, you need transparent communication across collaborative tools. This allows a cohesive solution to support the legal team’s role by creating a workflow that meets your obligations. 

By embedding legal oversight earlier in the process and seeking out proven solutions from the heart of the capital markets, GCs can transform compliance from a reactive checkpoint into a proactive enabler of trust. In doing so, they not only protect the business from risk, but also strengthen its reputation in the eyes of regulators, investors and the market at large. 

6. References and further reading

• Steps to develop a strong compliance strategy 

• Action plan for digital transformation in risk and compliance 

• Insider trading compliance 

• Manage market consensus during pre-close calls 

• Manage personal account dealing