What are the benefits of an empowered General Counsel with a strategic oversight of a growing FinTech business?
The advantages to a business of a strategy-minded General Counsel was a topic of discussion at The Economist’s General Counsel 2019 event, where both our General Counsel, Ruth Pearson, and CEO, Christian Faes, took part in a panel exploring their relationship and the value of a legal perspective at the top table.
As a part of our Executive Committee, Ruth is involved in decision making from the beginning. This both improves the overall output of decisions and make actions run more efficiently as legal and regulatory considerations are taken at the start, rather than after planning has begun or decisions have been made.
The discussion was an opportunity to reflect on LendInvest’s growth, when the business felt an in-house legal team needed to be introduced, and how it as a function has fit in with its rapid growth and evolving needs to get to the stage where it is now.
They were both invited to ask questions of each other, which included how Christian views the General Counsel role and how it has developed in the business, and how Ruth approaches giving advice to the senior team and how that responsibility has grown over time.
We’ve expanded on some of the conclusions below.
Relationships at the heart of success
During the discussion, Christian was asked if he would have the legal function report into anyone other than the CEO. He said no, because the value of that advice is too great.
Ruth believes what gives the General Counsel role at LendInvest added strength is the willingness of the founders to listen to advice, and the depth of finance experience across the Executive Committee.
This means every member of the committee understands the value of compliance, good relationships with the regulators and imbuing that in the company’s decision making.
Building a sustainable, profitable business
Ruth sees a strategy-minded General Counsel as essential to the long-term sustainability of a business. It is helpful when the business wants to build something that will last, be profitable and make a sustainable contribution to its market.
In some start ups there’s a risk that an obsession with market share and revenue would make it harder for a General Counsel to have their voice heard where an attitude of greater risk for short-term reward might prevail.
For sustainable businesses, a strong legal voice at the outset of planning is essential in offering better foresight, better knowledge of upcoming regulatory changes and future-proofing.
Good governance throughout
The ability to lead from the top makes it easier to build a strong compliance culture throughout a business, especially one with a relatively flat hierarchy.
Where legal and compliance is embedded from the ground up, and works well at the top level of the business, it sets the correct tone for how it approaches tasks.
For a business that wants to succeed, embracing its regulatory requirements with strong legal leadership at every step of the journey is essential.