Who Let You into the House?

29 Pages Posted: 6 Dec 2011 Last revised: 12 May 2012

Lawrence A. Hamermesh

Widener University Delaware Law School

Date Written: December 6, 2011

Abstract

Recent Congressional corporate governance initiatives have reallocated to independent directors the functions of hiring and supervising the work of certain “gatekeepers,” and some have proposed such a reallocation with respect to general counsel, as a means to address cognitive biases and capture by senior management that may prevent inside counsel from identifying and preventing corporate misconduct. That proposal, however, does not sufficiently account for the positive effect on corporate conduct arising from a close relationship of trust and confidence between general counsel and the CEO or other senior managers. Eliminating such a relationship is likely to undermine access to internal information and the willingness of corporate actors to respond positively to counsel’s efforts to promote legal compliance. In contrast, steps short of reallocating oversight of the general counsel to independent directors are likely to promote independent judgment on the part of general counsel without unduly undermining those benefits.

Keywords: general counsel, gatekeeper, corporate governance, attorney-client, in-house counsel

JEL Classification: K20, M13, M14

Suggested Citation

Hamermesh, Lawrence A., Who Let You into the House? (December 6, 2011). Wisconsin Law Review, Vol. 2012, no. 2, p. 359; Widener Law School Legal Studies Research Paper No. 11-49. Available at SSRN: https://ssrn.com/abstract=1969065

Lawrence A. Hamermesh (Contact Author)

Widener University Delaware Law School ( email )

4601 Concord Pike
Wilmington, DE 19803-0406
United States
302-477-2132 (Phone)
302-477-2257 (Fax)

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