As boards implement anti-bullying policies to protect against a toxic management-to-employee workplace environment, they should also consider extending similar protection to the vital interactions between the general counsel and the CEO.

The supposed link between tough bosses and improved operational results has long been something of an urban legend in the business world; the presumption that harsh and possibly abusive CEOs produced better results. Yet leading academic research attributes that more to exceptional ability than to intimidating behavior. Indeed, the research has failed to demonstrate any “upside” to abusive leadership.

Perhaps for that reason, tales of a “toxic workplace” seem to be a regular staple of business news. Prominent CEOs and other leaders are not infrequently being dismissed for alleged threatening, humiliating and intimidating behavior towards subordinates. Boards are motivated by their human capital oversight obligations to address CEO bullying allegations that could impact workforce culture; the consequences notwithstanding.

The looming 20th anniversaries of Enron and other Sarbanes-Era corporate scandals provide a useful prompt to corporate boards to evaluate whether similar toxic conduct could, in particular, infect the critical general counsel/CEO relationship. Boards should be motivated by their legal compliance oversight obligations to address CEO bullying allegations that could impact the performance of the general counsel’s responsibilities.

Indeed, the leadership failures attributed to several of those notorious scandals were attributed in part to a breakdown in the management to board reporting relationship, when general counsel were forced to “pull their punches” on significant corporate risks, for fear of inciting an abusive and intimidating response from the CEO. Instructive in this is the seminal 2006 report of the Bar Association of New York City, “Report of the Task Force on the Lawyer’s Role in Corporate Governance”.

In several of the leading Enron-era scandals, in-house counsel knew enough about the nature of client conduct to have raised internal red flags. While some did in certain instances, others apparently did not. Of those who did not, some apparently did not appreciate the wrongful nature of the executive conduct because of the scheme’s financial complexity and the fragmented process in which the in-house counsel were consulted. Others, however, appear to have been heavily influenced by a pattern of bullying and intimidation by their CEO.

For example, subsequent investigations found that WorldCom CEO Bernard Ebbers generally excluded in-house lawyers from executive team participation and sought their advice and input on a limited and fragmented basis.” He “let [the attorneys] know his displeasure with them personally when they gave advice – however justified – that he did not like” and generally “created a culture in which the legal function was less influential and less welcome than in a healthy corporate environment.”

Similar investigations found HealthSouth CEO Richard Scrushy “to have created a culture of intimidation and made it personally difficult for anyone, including the General Counsel, to give advice that [Scrushy] did not like.” Within this culture, it was challenging for the general counsel to gain Mr. Scrushy’s attention on important matters; the CEO’s behavior made it difficult to engage with him on “things with that were bad news or that would make him unhappy.”

Certainly, enormous strides have been made in the last 20 years in terms of embedding principles of corporate responsibility within the executive suite, and in protecting the role of the general counsel in connection with corporate governance and advising executives on matters of legal and operational risk. Many of the lessons of the Enron era are well established.

But it would be recklessly naive to assume that these corporate responsibility changes have also worked to eliminate executive behavior that is openly hostile to legal advice, or a corporate culture that marginalizes by personal intimidation the value of the general counsel.

As the headlines of the last year suggest, bullying and similar behavior is still prevalent in some executive suites; has worked to the detriment of the organization and, when identified, has often led to the termination or censure of the CEO. Board members need to make the association between the stories about executive bullying and how it may affect key departments such as legal and compliance.

For there is much a board can do to protect the legal department from executive intimidation and harassment. The list of available tools includes: (1) including the general counsel in the coverage of anti-bullying policies; (2) regular executive session meetings in which the general counsel is invited; (3) periodic one-on-one meetings between the Chair and the general counsel; (4) board authority to approve/ratify the hiring, compensation and termination of the general counsel; and (5) confirming the general counsel’s duty to alert both the Board and other appropriate decision-makers to mission-critical operational risks and potential significant law violations.

There are many other similar tools, of course. Their value is not only in protecting the viability of the general counsel to CEO reporting relationship, but also in providing the general counsel with responsive alternatives short of resignation, or those required under the professional rules of conduct.

Many boards have been diligent in their support of anti-bullying policies, and their application to senior executive officers. The current headlines about CEO bullying, and the looming coverage about Enron/Sarbanes anniversaries, should combine to prompt board reflection on the need to protect the general counsel as well from intimidating CEO behavior. None of stakeholder interests, good governance nor corporate responsibility is served by exposing the general counsel to executive bullying and intimidation.

Michael W. Peregrine, a partner at McDermott Will & Emery, advises corporations, officers and directors on matters relating to corporate governance, fiduciary duties and officer and director liability issues. His views do not necessarily reflect the views of the firm or its clients.