Risk increases legal influence
Turnbull report brings heads of legal closer to the board
All the signs are that legal directors are now having a greater say in board-level decision making in the aftermath of the Turnbull Report.The Legal Director Benchmarker survey this month reveals that two out of five in-house lawyers believe their influence on the board’s approach to risk management has increased since the Turnbull Report.And the larger the company, the greater the influence in-house lawyers appear to have, with 64% of in-house heads in groups employing more than 2000 staff saying they have had greater influence on the board.The survey, carried out by independent research consultancy Opinion Research Business (ORB) and sponsored by Beachcroft Wansbroughs, questioned more than 104 heads of legal at quoted companies.While Turnbull has brought some directors closer to the boardroom table, the survey reveals an ignorance of the guide on corporate compliance and risk management among other in-house heads of legal.Although four out of five respondents said their company has a clear policy on the assessment and assumption of risk, a quarter of those that had a policy did not know whether it complied with the Turnbull guidance.And 8% admitted that they have not seen or read the Turnbull report at all.A majority of in-house lawyers questioned (54%) said they believe that the Turnbull guidance has improved corporate governance and the management of the risk process. But only a quarter believe it has improved shareholder value.The Turnbull Report, officially ‘Internal Control: Guidance for Directors on the Combined Code’ was published in 1998. It sets out a risk-based approach to establishing a system of internal control, with guidance on how companies should identify, evaluate and manage their significant risk.All listed companies are required to certify full compliance with the guidance for the year ending December 2000.
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