Month: March 2019

‘There is no reason why good cannot
triumph as often as evil. The triumph of
anything is a matter of organisation’

– Kurt Vonnegut, The Sirens of Titan

When looking for good in the world, corporate governance law is perhaps not the most obvious place to train your eye. However, there is a sizeable band of corporations – thousands, in fact – who have opted to start just there, using corporate governance as a springboard to the greater good.

Shareholder primacy, often cast as the villain in corporate scandals or blinkered business decisions, operates on the theory that the job of directors and management is to maximise return to the investor. In turn, corporate law is traditionally viewed as a contract between corporations and investors that the company will, in the balance of law, deliver the highest return.

‘But that’s really an assumption and not a fact of life,’ says Rick Alexander, corporate governance expert and former corporate attorney in the US corporate mecca, Delaware.

A benefit corporation is a corporate entity which includes certain positive impact requirements among its legally defined goals, allowing corporates to reject shareholder primacy in favour of a governance model that permits balancing the interests of other stakeholders – like workers, customers and communities. Maryland became the first state to specifically legislate for these kinds of corporations in 2010, and 30 others have since followed suit.

In the early 2010s, Alexander had been practising transactional law for 25 years and was responsible for maintaining Delaware’s corporate statute when he was approached by B Lab, a non-profit that operates a certification scheme for companies based on environmental and social responsibility.

‘They wanted us to adopt a benefit corporation statute in Delaware. And to be honest, we thought it was kind of cute, but not really serious. I was the chair of the council that worked on those issues and so our first reaction was pretty negative,’ he recalls.

‘But they pushed pretty hard and I ended up taking it on as a project to look more seriously at what they were talking about. As I looked into it, I became persuaded that traditional corporate law actually had a lot of assumptions built in that weren’t necessarily supported by any rational economic theory.’

Alexander’s change of heart and subsequent work was instrumental in Delaware’s introduction of public benefit corporation law in 2013. He even left the practice of law to become B Lab’s head of legal policy, promoting the concept of benefit corporations around the world.

Nowadays, B Lab and benefit corporations are still linked – in order to retain B Corp status (B Lab’s certification), companies must have a corporate structure that rejects shareholder primacy which, in the US, will often mean incorporating as a public benefit corporation. You don’t need to be a B Corp to be a public benefit corporation, although the two frequently go hand in hand – and are often confused.

Keeping your commitments

Among the roster of companies opting to incorporate as public benefit corporations, there are some big names. Global creative crowdfunding platform Kickstarter is one.

‘For Kickstarter, this was always the founders’ ethos,’ explains general counsel Christopher Mitchell. ‘They were not about, “Hey, let’s make our money on an IPO or sale of the company.” I like the fact that we are a very socially and politically active organisation. I think that goes hand in hand with being a public benefit corporation – being very aware of what is going on in the world, how it affects our community, how it affects your business and then what are the appropriate steps to dialogue about that and to get involved.’

When the legislation came along, the company felt that it was the perfect vehicle to crystallise Kickstarter’s commitments. Public benefit corporations must lock in a stated public benefit (or benefits) in their charter.

‘We are a for-profit entity, we operate like any normal business. However, it’s like having a double bottom line. What are you focused on, what does good look like, what does success look like, what are you working towards? As you’re making decisions as an organisation, what behaviour do you take, what actions do you take, what areas do you support? If you think about a lot of other organisations, their main focus is making money. Well, what if it wasn’t just that?’ says Mitchell.

‘What about if you said, “Well these other two or three things are important to us, and this is how we measure success”. Commitment to the environment and bringing creative projects to life are all part of that mandate. I think a lot of non-public benefit corporation organisations aspire to those things, but a lot of times those other goals become secondary to profit maximisation.’

Interestingly, Kickstarter’s shareholders unanimously backed the conversion to become a public benefit corporation. It could be that some investors believe they are looking at a generational shift of corporate values, and the public benefit corporation sits at a unique nexus.

‘It’s a paradox, but it can actually generate more value for your investors – your corporate structure communicates that you are a responsible partner and not bound by law to take advantage of every situation. I think right now we’re at a stage where individual companies are looking at adopting a benefit corporation structure as a competitive advantage, especially among the millennial workforce, or even the generation coming up behind the millennials, who are extremely interested in that sort of concept,’ says Alexander.

If public benefit corporations are aiming to inject virtue into corporate life, could this also trickle down into a better life for their in-house attorneys? Mitchell thinks so.

The North Star

‘I love it because it gives me another reference point. As counsel, you’re considering the law and the objectives of the business and you’re trying to organise those, but when you have these very clear stated commitments and rules, it just provides another reference point to help with the decision-making process. It prevents singular deviation on a project where someone might say, “Hey that’s fine but for this one we’ll just try this.” No, these are commitments, they’re set in stone,’ he explains.

‘It’s absolutely fantastic to have this North Star and this very clear statement driving alignment internally. It’s not just you’re the GC and you’re an outlier. You can point to the charter and say: “This is what we committed to be.”’

‘When it comes to a situation like dealing with a supplier who may not be performing but if we were to walk away, hundreds of their employees would lose their jobs, we look much further than the financial impact of the decision and often make what might seem like an unorthodox choice because it could cost us more in the end,’ adds Hilary Dessouky, general counsel of outdoor apparel company Patagonia, which incorporated as a benefit corporation in California in 2012.

‘At Patagonia, people and planet come first and that is a great foundation for decision making. It adds complexity because there are so many different factors to consider and that can be hard at the beginning. But it’s like a muscle that you have to exercise, and when you see the results, you want to keep working on it.’

Building muscle

For Laureate Education, becoming a public benefit corporation took a little heavy lifting for the incumbent GC’s predecessor. In 2015, the for-profit network of higher education institutions changed domicile from Maryland to take advantage of the shiny new Delaware law. Maryland had its own similar statute, but as the PBC structure had gained traction, model legislation was developed to address thorny issues of fiduciary duty and shareholder liability, and Delaware followed this trend – which appealed to Laureate when it decided to reincorporate.

‘I think any time you’re thinking about making a change in your legal status, the general counsel is critical. The GC has got to understand what’s required and has to be the one to take a hard look at the organisation and ask “Is it really in our best interests to do this, can we really be a public benefit corporation, what is that going to mean for us?” There are going to be legal requirements, the board of directors is going to have to understand what this means, they’re going to have to feel comfortable with it, they’re going to have to vote for it,’ says Victoria Silbey, CLO of Laureate since 2017.

The general counsel also has a vital role to play in drafting the public benefit purpose that the company is nailing to its mast.

‘It needs to be both specific enough to really talk about what you do but broad enough to last for a long time, as a company may change emphasis and strategy. You have to think about it as almost a legal contract, so it’s critical that the GC is part of the decision-making process around that purpose,’ she says.

The Laureate team eventually settled on ‘To produce a positive effect for society and for persons by offering diverse educational programmes, both on premises or campuses located in the communities we serve online’.

‘If we are acquiring or divesting a college or university somewhere on the globe, part of the questions that we ask ourselves is whether this will be good for students. Can we offer students more – better access, better educational opportunities, better outcomes, better ability to get jobs, to get salaries that can support them, for example. We are constantly evaluating those outcomes, doing studies to see how our graduates fare. We’d probably do that anyway, but being a PBC gives us the context in which to put these questions and to make these decisions,’ explains Silbey.

Investor reception

But is it really possible to balance profitability with a commitment to the greater public good?

CircleUp, a company that helps consumer product start-ups to raise equity, thinks so.

It applied machine-learning software to scoring like-for-like strength, reach, growth and intensity of consumer brands in June 2018, finding that 93% of B Corps (distinct from public benefit corporations, but connected by sustainable ethos) scored above the average. The software also reported a 49% growth in sales, three times more than the category cohort.

But not all attempts to marry a sustainability stamp and profitability have escaped a bruising, particularly in the public realm. After the board ousted the CEO of e-commerce platform Etsy in 2017 amid swirling reports of overspending and falling share price, the vocal champion of stakeholder culture and then B Corp released the following statement from its newly installed CEO, Josh Silverman:

‘Since 2012, Etsy has relied on third-party certification, known as B Corp, as one of the ways we demonstrate our public commitment to running a sustainable, socially responsible business. We are proud of our B Corp certification, and of our track record of improving our B Corp score after each impact assessment.

‘One of the requirements of B Corp certification for corporations incorporated in Delaware is that a company must change its corporate structure from a C Corporation to a benefit corporation. As we have said publicly over the past year, Etsy will not seek conversion to a benefit corporation by the December 2017 deadline because converting is a complicated, and untested process for existing public companies.’

Etsy declined to be interviewed for this piece, but B Corp’s Rick Alexander is reluctant to concede that its specific situation has any reflection on the reception of the PBC status among investors.

‘Part of our certification is that at the end of a grace period, if they wanted to keep the certification, they would have had to become a benefit corporation and that would have meant getting a two-thirds vote from their shareholders. At that time they were kind of in a struggle with their shareholders, they had some not-good performance, there were hedge funds in the stock and eventually there was a whole turnover of management. That was not a company that had a problem with being a PBC, it was a company that wasn’t in a position to get a two-thirds vote on anything, let alone PBC status,’ he explains.

Certainly the experience of Laureate Education, the first company already with public benefit corporation status to make an IPO, has been relatively smooth – though Silbey admits there was a little trepidation beforehand.

‘One of the concerns we had was that public markets would not be receptive – it was kind of unchartered territory. I don’t think that that’s turned out to be the case – I don’t think we have investors who aren’t investing or shareholders who aren’t shareholders because we are a PBC. But we really didn’t know at the time,’ she says.

‘We definitely had to explain it. It’s not that common in general and nobody was public beforehand, so when we filed our IPO doc and our 10-Ks since, we had to very carefully explain what it means and why it ties into our overall mission. We needed to be very clear and anticipate the questions that we might have: Does that mean that there’s not going to be good shareholder return, does that mean that you’ll put everybody else ahead of shareholders? We needed to think through what those questions might be and then to address them both in our written documentation and in other conversations with investors.’

Because public benefit corporations are obligated to make decisions that honour a specified social or environmental purpose, they can be held to account for not doing so. The Delaware statute has therefore built in protection for companies so that such lawsuits can only be brought by shareholders owning more than 2% of the company, and that no monetary damages can be obtained, only assurances that the company will improve.

‘For the most part what the statute does is eliminate risk. It makes it easier to operate in a way that’s socially and environmentally conscious, so we reduce the risk that anyone would ever sue you for that,’ says Alexander.

Adds Silbey: ‘If you are carefully considering the decisions you’re making in both the long term and short term, I think that the risk is manageable. We have thought about it and when we do governance training for our senior leaders and for our board members this is an area that we cover – and we get some thoughtful discussion about it.’

A moment of reflection

Having public benefit corporation status has reporting requirements, of course, although at once every two years in Delaware, these are not too onerous.

‘On one hand this is a statement to the public but also for ourselves, it’s a moment of reflection. How well did we actually do? It’s an important piece of feedback,’ says Mitchell.

Like Kickstarter, Laureate is also a B Corp, and B Lab’s granular auditing process provides a similar opportunity for introspection.

‘For the B Corp status, we were concerned that it might be too hard. To get audited on things like environmental footprint and supply chain issues was very new for us and we didn’t really know how we were going to do. We’re not making sneakers, so we’re not checking our supply chain more regularly,’ explains Silbey.

‘So this was a brand new horizon for us, but it’s been great, actually. Because it goes all the way down to a campus level review, we get really good insight into our institutions and how things are going and it helps us then make decisions when we engage vendors – it gives a framework to think about choices we’re making throughout our network of institutions.’

The reality is that a public benefit corporation status is unlikely to appeal to a company that has not placed an environmentally or socially conscious agenda at the heart of its offering, like Kickstarter, Laureate and Patagonia have. The jury is out, however, on how an ethical agenda might be protected in the event of a takeover, especially in the case of rolling back commitments – however legally.

‘In a hostile takeover there’s a limited amount that can actually be done, and I haven’t really thought through should we have a poison pill specifically related to PBC status,’ says Silbey.

‘But certainly with respect to a non-hostile transaction, our directors would try to weigh the different questions that we have as a PBC about commitment to students and communities and outcomes, so we would balance all of that with other fiduciary duties and shareholder considerations.’

A sustainable future

Public benefit corporation status is, fundamentally, optional. But what if it wasn’t?

Senator Elizabeth Warren, Democrat and 2020 Presidential hopeful, last year announced the Accountable Capitalism Act, which strikes at the same target as the public benefit corporation: shareholder primacy.

‘In the early 1980s, America’s biggest companies dedicated less than half of their profits to shareholders and reinvested the rest in the company. But over the last decade, big American companies have dedicated 93% of earnings to shareholders – redirecting trillions of dollars that could have gone to workers or long-term investments. The result is that booming corporate profits and rising worker productivity have not led to rising wages.’

A key plank of the Act calls for corporations with more than $1bn in annual revenue to obtain a federal charter as a ‘United States corporation’, obliging directors to consider the interests of all corporate stakeholders.

‘This approach is derived from the thriving benefit corporation model that 33 states and the District of Columbia have adopted and that companies like Patagonia, Danone North America, and Kickstarter have embraced with strong results’, stated Warren.

The road to legislation, like government, is a long one, and much is in the balance with this Bill. But, if a corporate governance trend is turning heads – and public opinion – there could be interesting times ahead for large companies.

All the more reason for the general counsel to ensure they are involved in any process of governance change or audit from an early stage – whether that’s becoming a public benefit corporation, B Corp, or a future permutation.

‘Sometimes at B Lab we’ll be dealing with a sustainability group in a company, and they’ll say “Let’s do all the other stuff and then we’ll do the legal” – because nobody wants to call the GC!’ says Alexander.

‘We encourage people to socialise the issue early and to make sure that there’s board-level discussions about certification and that the board understands the legal piece. The GC is going to be key in the boardroom’.

Taking up a career in law is a full-time undertaking – of that there can be no doubt. There’s just no substitute for the commitment, both personal and professional, to pursue the pinnacle of the legal track. You’re either in or you’re out.

Or are you?

In that respect, Ironclad general counsel Chris Young is certainly the exception to the rule. Taking up law as a backup option following the disappointment of a professional athletic career that didn’t quite materialise, Young would wax and wane between the worlds of lawmaker and legal practitioner throughout his 20s and 30s – the period of time during which most wide-eyed lawyers are busy cutting their teeth at the photocopier and tailing partners in the faint hope of recognition.

But taking the well-trod path was probably never going to be an option for Young – it just isn’t in his nature. Five minutes in his company is more than enough to demonstrate that to even the most prominent traditionalists from the legal industry.

‘My journey, it certainly isn’t the usual one – nor one that that I think too many people would be in any rush to emulate,’ says Young.

‘I’ve taken a lot of chances, a lot of risks and I’m fortunate enough to have come out on the right side. Some of that has been through good old-fashioned hard work, some has been through being in the right place at the right time. But I’m not too proud to admit that a lot of it has probably just been straight-up luck!’

HOOP DREAMS

Despite living a career (still in its relative infancy) that would be the envy of those pursuing either law or politics (or both), neither were even on the radar for Young as he entered his final year of high school.

‘Like many 18-year-olds, I was convinced that not only was I going to get a full-ride scholarship to a [National Collegiate Athletic Association] Division I school, but that I was probably going to play in the NBA one day. It wasn’t too long after my senior year of high school that I realised my dreams in that respect, unfortunately, were probably not going to come true,’ says Young.

‘Becoming a lawyer – honestly, it wasn’t exactly my first choice. It came about when my basketball dreams didn’t materialise in the way I thought they would.’

That his basketball dreams didn’t materialise wasn’t for lack of ability or opportunity; rather, Young was a victim of circumstance and poor timing – certainly the only time those final two words grace this narrative.

‘I had received a full-ride scholarship offer to go to the University of Denver and play basketball for coach Dick Peth,’ recalls Young.

‘I decided not to sign before my senior year started, because we had such a strong basketball team that I figured other offers would come in throughout the course of my senior year. Turns out, there was no stronger offer than the initial one I received from the University of Denver.’

‘Just as I was scheduled to fly out and sign my letter of intent and meet with Coach Peth, he called me to let me know that he was moving on to a different school. The head coach position was going to be assumed by another Division I coach from the south, who would be moving up and not only taking that position, but bringing his recruits with him. The upshot was, if I hadn’t signed by that point – which I had not – I no longer had a slot.’

Through no fault of his own, Young’s dreams of starring on the hardcourt had been squandered – forcing an audible of the highest significance at the most inopportune moment. But disappointment is all about how you deal with it. And Young had the right support networks in place to help him retain a level head and chart a new path.

‘I’ll never forget the conversation my father and I had one night after that. We stayed up until the sun came up, talking about what I was going to do, what my career was going to be if I didn’t play basketball. It was that night I decided I wanted to be a lawyer,’ he says.

‘What first piqued my interest in the law was the prospect of becoming a sports agent. I figured that if I couldn’t play basketball myself, maybe I could represent basketball players – help guide them financially, legally and otherwise – and potentially make a good living myself. It seemed like a dream job, I’d still be around sports, but as a lawyer. Not a bad consolation prize to being a player myself.’

KEEPING IT CIVIL

Adjusting at the last moment is rarely an easy task – let alone when the stakes are as high as deciding on a tertiary institution and, subsequently, a career. But Young would take it in his stride and, following a whirlwind tour of prospective colleges, opted to accept a place at San Diego State University.

‘When I got to college, my mind opened up much more than I could have imagined. I had a chance to take honours courses at the university and learn about things I hadn’t learned about before – I really got into the civil rights movement,’ says Young.

‘What fascinated me was not only the ability of a bunch of ordinary people to come together to do extraordinary things, but the role that the judicial system – and in particular lawyers – played in those civil rights battles. I became inspired by some of the lawyers who, throughout history, fought for and on behalf of people who didn’t have rights everyone else had and often didn’t have the voice to fight for themselves.’

Young credits his interest in civil rights, but perhaps more broadly his success during this period, to the strong mentorship he received from a number of figures who were willing to give him the benefit of their time and experience. But one in particular stands out – someone who continues to play an important role in his life to this day, nearly 20 years on.

‘For me at the time, it wasn’t just reading the literature or attending the classes that led me to be so passionate about civil rights and trying to affect change, it was actually a professor named Dr William Cheek,’ explains Young.

‘I had the privilege of taking his class when I was 20 years old. He was a white southerner from Virginia with a southern drawl. I walked in and I immediately thought, “I’m not sure this is going to work.” So I sit in the back of the class as I always did. Throughout the year I’d move up closer and closer to the front of a class based on how engaged I was with the subject matter. It only took me two weeks to sit in the front row of Dr Cheek’s class. And it only took two weeks or so after that to meet with him during office hours to get to know him.’

‘Dr Cheek is a well-renowned biographer and a historian who focuses on the civil war, reconstruction, and the Jim Crow and civil rights eras. Being with him and learning more and more about our country’s rich yet disturbing history is really what heightened my newfound passion for civil rights and considering how I might one day try to affect change after earning a law degree and becoming a practising lawyer.’

A TASTE OF GOVERMENT

As Young graduated from San Diego State with a Bachelor of Arts, with law school and the pursuit of civil rights both weighing heavily on his mind, he faced a crossroads of sorts. One, he admits, was rooted in fantasy as much as it was in reality.

‘At this time, I had this vision and this fantasy of one day working to bring people together. Bridging the divide in America, creating empathy, and doing all the magic that some of these giant legal minds and practitioners had done in this critical era of American history, the civil rights era,’ says Young.

‘I applied for law schools. I also applied to be a Senate Fellow in the California State Senate. The idea was that I always knew I had some interest in government, politics and policy.’

While a desire to pursue politics in some form was of clear interest for Young, instead, he would opt to return to Sacramento and put law school on hold – a decision in large part motivated by a desire to return home and help his family, in particular his mother, who was recently widowed following the loss of his father.

‘Instead of going straight to law school, I took a different track and before starting my fellowship in the Senate was presented with an opportunity to intern with a man named John Burton, who was a long-time, well-respected senator representing San Francisco. It was in his office that I responded to letters from prisoners who had complained that their parole date continued to get pushed, and they were being wrongfully denied their day in court, so to speak,’ says Young.

‘It became really important to me to learn about these issues, learn about the Prison Litigation Reform Act and to be responsive to the prisoners that were frustrated that they didn’t have a chance to prove they were worthy of a second chance.’

DREAMS FOR MY FATHER

In a period where Young was laying the foundations for his future professional life, it’s prudent to consider how his past – and, in particular, that of his parents – shaped the philosophies and beliefs that would characterise this time for him.

‘My father is black, he was from just outside of South Central Los Angeles – specifically a city called Watts. He ran away from home when he was 11 years old, joined a gang, and became a well-known gang leader over the years,’ explains Young.

‘He also spent most of his adolescence and early adult life in prison. In fact, the last time he served in prison, he served in Folsom Prison, which is near Sacramento. When he paroled from prison, he decided not to go back to Los Angeles, and instead stay in Sacramento.’

That decision would be a life-changing chance for Young’s father – much like the ones which have shaped Young’s own life – eventually leading to his father and his mother meeting, as well as the chance for his father to pursue higher education himself, going on to become a married school teacher with children – a far cry from the life he left behind.

‘Despite not having spent a single day in high school, my father taught himself how to read in prison and very much wanted to get a college degree. After completing his last stint in the penitentiary, he enrolled in the Educational Opportunity Program through Sacramento City College. He rented a small studio apartment in a house, a Victorian house in downtown Sacramento, referred to as the Pease Conservatory,’ says Young.

‘It was at this house where people taught music too. My father was in this little studio upstairs. The second and ground floors were people teaching music. My mother was a young piano teacher, with blonde hair and blue eyes. My father admired her from afar, but he was black, had been shot in the face, had scars all over, was beat up, and fresh out of state prison. He thought, in no world, in the early 1970s, when it was still illegal in certain places in the United States to even marry someone who wasn’t your race – particularly a white woman marrying a black man – that there was any chance in hell that they would actually link up. But they did and as soul mates enjoyed a long, beautiful marriage before my father died nearly 30 years later.’

SO, ARE YOU GOING TO HELP?

Fast forward a few years and Young would find himself facing opportunity once more. After accepting a scholarship to UC Berkeley to study law – slightly later than anticipated but not without the benefit of government experience – Young would find himself working as a litigator at Morrison & Foerster.

‘While there, I had the opportunity to join Tony West, another mentor of mine [and now general counsel at Uber], and a few others to participate in a conference call with Barack Obama. We were all early donors to his exploratory committee. On the call, Obama mentioned that he would make a decision over the holidays about whether to run for President,’ says Young.

‘Well, as we know, he did in fact decide to run and made his announcement speech in February 2007 in Springfield, Illinois. At the time, I flew out to attend his announcement speech with what’s now quite a star-studded line-up of folks: Kamala Harris, who’s herself running for President but was then district attorney of San Francisco; her brother-in-law, Tony West; now-mayor of San Francisco London Breed, before she’d ever run for office; and Ben Jealous who just ran for Governor of Maryland.’

‘This little group of us, we were all living very different lives at the time, but had the opportunity to go down to the basement of the Capitol with Obama’s close friends and family. We had the chance to meet with Barack and Michelle [Obama], exchange niceties and take pictures.’

It was at this brief gathering that Young, unbeknownst to him at the time, would leave an impression on the future President – although probably not for the reason he had hoped.

‘I had to take multiple pictures with Obama because the camera I was using kept failing to fire properly. He seemed to be getting a little annoyed with me, but I showed him what was happening and he was cool about it. From then on, he seemed to remember my name – even if it became a bit of a running joke,’ explains Young.

‘Two days later at a kick-off fundraiser in Chicago, I went up in an elevator together with both Barack and Michelle. The first thing he said to me was “Another picture?”. Every time I saw him from then on, I was always asked about whether I wanted a picture. Until one day he said to me, “So are we going to keep taking pictures or are you going to help me with this campaign?”’

YES, WE CAN!

While the offer from Obama was a tempting one, it wasn’t as straightforward a decision as it may have first appeared, particularly with the benefit of hindsight. Now secure in a role at Morrison & Foerster, with the prospect of clerking for a federal judge on the horizon, joining the campaign of a man then seen as having a remarkably outside shot at the presidency represented a major risk – personally, professionally and financially.

‘At this point, I hadn’t taken it too seriously. But when I gave it some thought, spoke with some of the folks at the firm, as well as the deferral district court judge I was supposed to clerk for that summer, I made up my mind,’ says Young.

‘Both the judge and a few partners at the firm really encouraged me to take a risk and go out to campaign with then Senator Obama. So I took a leave of absence from Morrison & Foerster and worked out an agreement with the judge to go back at a later date and I set off as Obama’s first hire based here in Northern California as his deputy finance director.’

While the backing of his legal contemporaries may have made the decision easier than first anticipated, Young believed in the message and timing of what Obama was campaigning on.

‘For me personally, Obama’s message resonated because what he talked about was something that I’d lived. Like him, I had a white mother and a black father – I could empathise with his situation, figuring out his identity as he grew up,’ explains Young.

‘I also appreciated the unique talent Obama had with his ability to stir the emotions of the masses and create empathy between groups that historically have been divided. In being white and being black, he could navigate between both worlds, so to speak. I also thought at the time, two years into George W. Bush’s second term, that what the country needed was unity. We needed someone who could bridge the divide and bring us together. That’s what originally attracted me to the campaign.’

Proudly recounting war stories from the campaign trail – and what represented a near two-year commitment in his life – Young can distil the personal takeaways to a single, most prominent lesson.

‘One of the biggest lessons I took from spending as much time as I did with Obama was his ability to keep his composure. He really always, always embodied that, it didn’t matter how stressful a situation would be, all the highs and lows of the campaign, he remained composed,’ says Young.

‘I’ve often looked back on the highs and lows he faced, how he dealt with them, then used those as inspiration as I navigate my own life – both personally and professionally.’

LAWYERING UP

In the years that followed the Obama campaign, Young would tread the line between both law and politics, working with Sacramento Mayor Kevin Johnson’s transition team in the immediate aftermath of his election and later his senior counsel and adviser, then as a political appointee in the US Department of Justice, before taking up a position at litigation powerhouse Keker & Van Nest [now Keker, Van Nest & Peters]. After spending four years there, he would depart to join a former colleague at the venture-backed upstart, OpenGov, an opportunity to combine his legal knowhow with his passion for politics.

‘While at OpenGov, I got a call out of nowhere from a partner at a well-known venture capital firm who asked if I had any interest in being the first lawyer at a company called GoFundMe. At the time, I was happy with my position. I hadn’t heard of GoFundMe – something I would later learn put me firmly in the minority of most Americans,’ Young explains.

‘I went in, I spoke with the folks, was impressed by the service and what the platform provides people all over the world and, of course, the team that they had assembled to take the company to the next level was incredibly impressive. I was fortunate enough to receive an offer, and I joined the company shortly after.’

At GoFundMe, Young had the opportunity to cut his teeth as an in-house counsel, while also shaping the direction of his department of one and helping to cultivate a culture that resonated with his own personal beliefs and philosophies, particularly in the area of diversity and inclusion.

‘What stood out was that GoFundMe understood that it had a very diverse userbase and so, on our executive team, there was a real premium placed on championing diversity both in terms of personnel and of perspective. For me personally, in the legal department, most of my work from a diversity and inclusion standpoint was carried out in the form of hiring diverse outside counsel, and hiring underrepresented minorities on my team. I’ve often believed that it’s good to talk about diversity, and raise the issue, and make sure it’s at the forefront of folks’ minds, but I found that even more important than talking about it is actually acting on it,’ says Young. ‘At GoFundMe, like many other companies, the legal department was viewed as a cost-centre and in-house lawyers are often expected to do more with less. Whereas I had worked at the US Department of Justice and at a private law firm where you have all the support you could possibly need, as in-house counsel I had to quickly figure out ways to build machines or to procure software that would help cut out a significant amount of the administrative work so that I could focus on the more strategic and impactful work that was expected of the company’s counsel.’

It was during this search for technological efficiency that Young would first come across Ironclad – then a small-time start-up, whose software was helping to change the face of contract management for in-house counsel.

AN IRONCLAD OPPORTUNITY

‘Ironclad’s focus was on contract management, including by automating various contract-related processes that turned out to be pain points for me. I implemented it relatively quickly. In fact, it was the first software I procured, ever, but also at GoFundMe,’ says Young.

‘In getting to know the organisation well, I realised very quickly that every company is a contracts company and every team is a contracts team. Whether it’s HR, sales, marketing, finance, G&A, you name it – contracts are everywhere. And for any in-house counsel, manually managing contracts and not knowing where they all are or what’s in them is going to keep him or her up at night. So, I watched this company with this incredible product address a need in the market that was absolutely glaring and, over the years, watched them continue to grow and evolve. Fast forward almost three years from the time that I met Jason [Boehmig, CEO], there was an opportunity to join the company as its general counsel, and I jumped at it.’

Now six months into his tenure at Ironclad, a company that, like any start-up – even one backed by venture capital powerhouses like Accel and Sequoia – once again represents both major risk and opportunity for Young, he remains upbeat and excited about what lies on the horizon for the upstart company – after all, for a legal software company, it’s hard to have a better recommendation than an avid user coming on to join as general counsel! Faced with the prospect of once more starting from scratch and having to reinvent himself, it again becomes a matter of first principles for Young.

‘For me, the North Star has always been an insistence on spending my professional time having a positive impact on people,’ says Young.

‘One of the lessons I’ve learned throughout my career is that you can’t forget what initially motivated you to get a law degree. Although I have not become a civil rights lawyer, I’ve never forgotten why I decided to go to law school. It’s to effect change. Change doesn’t have to be effected on the macro level, it can be effected on the micro level. It doesn’t have to be the entire United States or the world. It can be a community. It can be someone you mentor. It can be personal. It can be professional. It can be a combination of all those things. So long as I don’t lose sight of that, I’m up for whatever life may throw my way.’

Picture the scene. A darkened theatre. An expectant hush. The stage empty but for the waiting red spot.

But you’re not a professional speaker. You’re not a household name, ready to entertain with tidbits from your new book.

You’re a GC. And it’s compliance training time.

For Nishat Ruiter, this scene is not a million miles from reality. General counsel of TED, an organisation that has reinvented the conference, packaging mind-expanding ideas into pithy, spreadable talks perfect for both live enjoyment and the internet age, she is tasked with delivering legal concepts to an organisation whose stock-in-trade is communication.

‘People here love ideas. They are insatiable, curious people. It really feels that people who are at TED are there because they really feel driven to be there. I walk to the kitchen to grab a cup of coffee and I’ll be so enlightened in two minutes by the person I bump into because we’re talking about an issue or an idea or a solution that they found, and that becomes super compelling,’ she explains.

The compliance training bar is set unusually high, but rather than be daunted, Ruiter is inspired by the challenge.

‘The people at TED are working toward bringing ideas to as wide and as broad an audience as possible, but also focusing on the quality of the ideas. So then how does compliance match that? What do I do?’

She adds: ‘I would love for them… after hearing the calibre of speakers that are typically on stage at TED, including Bono, Sir Ken Robinson, Mellody Hobson and others, to hear something worth remembering and I realise the legal concepts should also represent great ideas – where possible’.

Any GC worth their salt has their finger on the regulatory pulse to spot compliance topics that will resonate with the legal and other issues facing their organisation. But the question of delivery takes something more than legal knowhow.

Ruiter created a bespoke compliance approach for TED staff, capitalising on the organisation’s open and collaborative culture to deliver a bold, fresh, and evolving suite of training events, based around three words: relevant, compelling and empowering.

Relevant

‘If you have a picture of compliance as a living, breathing, dynamic culture, you’re learning with your organisation, you’re in constant contact with your client, and you’re learning about how to best bring relevant information to them,’ says Ruiter.

‘I also value non-legal input to frame my compliance examples. Since I view things through a legal lens, it’s helpful to hear from non-legal colleagues how to use examples based on their day to day versus my own. This helps me fit into their frame of reference so when compliance examples are brought up, I tie it to real-life scenarios that they deal with every day to ensure it fits and sounds relevant to what they go through.’

For Ruiter, it is important to customise the presentation to the audience, leveraging the trademark TED informal style of presentation and using examples drawn from a similar industry sector, so that the message lands. And that message should be a positive, practical one.

‘I don’t agree with the compliance training style of: “You cannot, you shall not”. I don’t believe that that’s as meaningful as: this is why we have to do this. This is why it’s important that we don’t fall into these traps. Here are ways to help you. Here are tools to remember. Here are some implications and cases that have arisen because someone didn’t learn how to do this. Here are examples of what you can look out for.’

But she is particularly careful to go easy on the level of detail.

‘If you ever look at a TED talk, the slides are typically used to amplify the idea that is being shared by the speaker. In legal presentations, the slides can comprise “all” of the ideas and typically fill up the frame, it’s designed with small font, and contains so much detail it is easy to lose the audience. Instead, I like to use animation and the use of simple graphics to illustrate brief points that summarise the lessons learned, hitting home with examples that are brief and to the point.’

Compelling

In Ruiter’s approach to compliance, the devil is not in the detail, but in finding a compelling format that can hold the crowd long enough to absorb the necessary points. This has led her to experiment with novel ways of delivering content.

‘To communicate an example of harassment, I created an audio podcast exercise, recording a couple of volunteers from TED in our studios. The idea was: what if two people were socialising after work, there was an interesting after-party, something happened, someone did something to someone. Rather than describing the scenario, we play the actual role-play in the podcast. We take the victim’s perspective first. Then I give them the opposite scenario. What’s the other person’s perspective? Because in every investigation that I’ve done in many years of doing compliance, there’s always two sides to the story. They hear the situation. We pause. I ask them what they thought,’ she explains.

‘I made this very personalised. I only had up to 25 people in the room. We served doughnuts. We allowed for questions. We made it intimate and we allowed for this in-person training because that is what I know will impact them. They are so creative that I needed to hold their attention with something that’s authentic and real.’

On another occasion, she ordered custom-made cookies to get the message across.

‘When I first got to TED, we updated the privacy policy and needed to explain the use of cookies and consent. So, at the staff retreat, we ordered specially baked cookies that had the word “Privacy” written across them (in red of course). On stage, I had about five minutes to present the concept and explain privacy, consent and why we updated our policy. So to demonstrate, before I passed out the cookies, we made sure everyone had to “accept” them first. It made a “tasty” impression and, while I don’t know for sure, my sense is that everyone walked away understanding cookies and consent in a way they never expected,’ she recalls.

Empowering

‘One of the biggest opportunities I believe lawyers have is to move away from the “us” and “them” concept, especially for in-house counsel. Using phrases like “They would never get it” or “They don’t care about legal” or acting as if legal is better than their clients misses a great opportunity of learning for everyone,’ says Ruiter.

‘Unless you make it a “we” situation, I don’t think they’re ever going to really take you seriously and I think that it’s not going to be as compelling and as effective as if you make it an “us”. We’re all here together. We all work for the same company.’

TED has an anonymous reporting system to address internal code of conduct issues, which staff are encouraged to use. The reporting system allows for a more transparent process where anyone can raise topics of concern without fear of retaliation, a protection that Ruiter believes is very important to retain when dealing with compliance.

‘Another way to address empowerment is to ask them to help with spotting red flags. This is a concept that seems obvious but can be lost when planning training in the field. In some ways, I feel like I have 250 staff members that play part of a legal role in their day to day, because they are looking and noticing issues before they arise and that helps me address them proactively. Training should be geared to tap into their sense of what is right and how to spot a “red flag” so they can get used to identifying concerns before they become a problem. Using case studies and examples, we explore together during the training questions such as: What could they have done? Why did the person choose the wrong direction? How could they have prevented the issue from happening? When you ask questions like this, and promote an open and honest discussion, there is a different level of involvement and engagement. Honestly, it reminds me of the challenges of being a parent. You can always tell your child “not” to do something, but in my experience it is more effective to show them why it is important, present an example that is compelling and help empower them to make the right decision.’

After internal training events, Ruiter sends out a survey of open questions to uncover what resonated and what didn’t among attendees, which can then form the basis for future improvement.

She explains: ‘I wanted to be transparent. We’re always learning and it’s important to always get better. Survey questions have been: What parts did you think were interesting? Was there a part that you really enjoyed? Was there any area that was confusing? Do you have any questions? Is there anything you’d like to learn more about? Is there something that bothers you? Why or why not?’

Fundamentally, Ruiter believes it is important to employ tools that empower non-legal colleagues to take ownership of the compliance training process, rather than passively complete off-the-shelf packages that, no matter how ‘interesting’, fail to strike a chord because they are too generic to speak the language of the organisation.

‘Assume that the people in the room can actually help – if you could ask them to help do something, what is it that you’d want them to do? Then frame the compliance training around that to give them real practical tools, and go back and be your advocate. That really reframes everything. It takes away from the us-them dynamic, it hopefully will make the presentation interesting and it will hopefully make it relevant, because you’re asking them to do something and be part of the process with you. I find that when you bring everyone on board and you share the same vision, a lot of amazing things can happen.’

On the road

TED compliance has an outreach element, as the organisation also retains a code of conduct for attendees at its annual conferences. TED conferences have always been organised to present ideas to attendees in an atmosphere of respect, professionalism and open curiosity to share ideas. However, at times, individuals that attend could lose sight of this important aspect of TED, and thus the code of conduct and reporting system is set up for all attendees, vendors and staff at the conference.

‘They have always been organised with the intent of maintaining an atmosphere of open curiosity, and you can’t do that if people are trying to oversell their stuff, or bothering you because they want to take a selfie because you’re famous, or harassing you, or discriminating against you and treating you wrongfully,’ says Ruiter.

‘The way we address our code of conduct at our conference is three fold: we publish our code of conduct in our programme, we have provided an anonymous reporting mechanism to allow for reporting in a safe environment, and we provide assistance with trained advocates to help attendees, if needed, in filling out the form or addressing their concerns. We created this system to help prevent issues and address them head on if and when they occur at the conference. By doing so, it adds a level of transparency and meaning behind our code of conduct that is of fundamental importance.’

Ruiter has trained a team of TED employees who act as advocates and assist attendees, if needed, as issues arise. If an investigation arises, then TED addresses each violation on site, either resulting in a warning, loss of badge privileges from a session or event, or it could result in sending the attendee home without a refund.

‘If we don’t know about the issue then things can fester and make the experience unfortunate or uncomfortable. When you’re in an employee organisation, you have managers and you have peers and you have colleagues, and you’re hopefully in a very friendly area where you will feel comfortable and you have resources like HR and legal to help you. When you’re an attendee, while you are not at a place of work, we still wanted to provide a resource that is simple and accessible for everyone.’

‘We have a process that shows to our employees the level of care and meaning behind the words that we give, and by having a dynamic level of code of conduct for conferences, it also reflects that we care deeply about the experiences even at our external events – and we’re there to help.’

Into the future

Right now, Ruiter is at the stage of refreshing her code of conduct training to reflect this year’s legislative and regulatory changes, and is developing new ideas to keep it fresh. In addition, TED has worked with an illustrator-designer to create a simple, brightly coloured employee handbook that matches the tone of the training.

Above all, she believes, what you do must be steeped in the culture of the organisation – which means that, ideally, you should be too.

‘Try to be authentic with your clients, and learn about what is relevant to them. By doing so, it changes perspectives from “them” to “we”, and from “I” to “us”… setting a better standard and approach that ultimately is more effective overall and can hopefully drive better impact.’

Photographs by Dian Lofton/TED

Latin America can be notoriously challenging for business. Volatile politics and economics teamed with concerning corruption levels in some areas, alongside a more stable picture in others, conspire to create a complex and nuanced regional environment – which keeps those in the role of regional counsel on their toes.

Ines Bahachille, associate general counsel for Latin America at US IT company Ingram Micro, put a Sinatra-flavoured twist on her feelings about the region’s difficulties: ‘If I can make it in Latin America, I’ll make it anywhere!’

But the flipside is that having responsibility for markets as diverse as Mexico, Brazil, the South Cone, the infamous Venezuela, and others, can craft a unique set of skills for those tasked with legal responsibility at global organisations.

‘It makes you able to manage the element of surprise easily, to resolve complex situations with fast decision-making without panicking, and to see things in the proper context without the need to cause unnecessary alarm. It makes one lead by example, to inspire others to operate in a culture of integrity and to also demonstrate that local operations can actually influence the country positively,’ Bahachille explains.

‘It is important to vigilantly develop as deep a familiarity as possible with the legal frameworks and key local laws affecting the industry, but it is even more important to know what you don’t know, to have the judgement to know when it is necessary to call upon trusted local counsel and to be prepared to make adjustments to accommodate local differences when needed,’ adds Casey Furman, legal director, Latin America and Caribbean at Verifone.

Regional counsel have the opportunity to add value to the business in unique and highly visible ways, be that applying a creative approach to investments that a global company can make in local markets, or lobbying to positively impact the footprint of the industry more broadly.

‘Governments change, laws change and obviously we have to be very proactive and understand the impact that these changes may have on the business side. Our industry is evolving constantly in technology and we look to work through associations to lobby and educate both the regulators and the governments, as well as to understand the industry while at the same time ensuring that these regulations don’t have a negative impact on the business side,’ says Larissa Zagustin, general counsel for International Media Networks Americas at Viacom.

‘We’ve had many cases where there have been regulatory changes that have helped increase revenues, so the business teams have felt a direct impact from our efforts because it’s basically allowing what used to be more restrictive to be more flexible, where the business teams can now generate more revenues.’

Latin America has opportunities for growth that lend it enduring appeal for investors looking to scale in the region, meaning that global corporates continue to play an important role, despite operational challenges in some jurisdictions.

Viacom has been busy creating new business lines and building strategic partnerships, expanding both in scale and reach. An example is the launch of Miami-based Viacom International Studio, illustrating Viacom’s ambitions to grow its content creation across the region, producing content for its own platforms, as well as for third parties like Netflix and Amazon. The company also has a joint venture in Brazil, and acquired Argentinian television station Telefe in 2016.

‘The formats generated in Brazil and Argentina have amazing potential outside of those specific countries, so we’ve been looking to grow, take that intellectual property and expand it. Viacom International Studio is looking how to tweak these formats and export them around the world. So it starts locally, but the formats have been successful enough that we’ve been able to take them to other parts of the world where they create their own version,’ says Zagustin.

‘We’re not just getting a pipeline of content from Viacom centrally, we’re creating our own content within the regions within our division. We are also establishing great strategic partnerships with third parties and that’s where it has been a great opportunity for my whole team to engage in business strategies that are not the typical way of producing content.’

As in other regions, being a flexible and creative business partner is the universal key to demonstrating value to the business – while, of course, keeping a firm steer on the ethical and compliance elements.

‘New issues, some foreseeable and others not, arise regularly, and solving them takes forthright communication and collaboration with the executive team. Getting to that place of communicating effectively and solving problems collaboratively is about gaining trust. It is also crucial to have a strong commercial acumen. As legal counsellors, we need to keep in mind that we are here to be solutions-oriented and to make business goals happen. When executives know that you have that mindset, it makes collaboration and communication much easier,’ says Furman.

But having that unique dual vantage point of both a legal and business lens can be especially useful in Latin America.

‘We have to recognise that some situations are non-typical or “non-common sense” sometimes, and that is when the set of skills of a counsel in charge of this region becomes very relevant,’ says Bahachille.

‘Once you gain the trust of the business, it is important not to overthink and just be truthful and authentic about the challenges and potential solutions. The key is to always keep in mind that we work for a company and not for specific individuals.’

Like elsewhere, the progression of in-house counsel to a position of business partner in Latin America has been most pronounced over the past decade.

‘Nowadays the general counsel is sitting at the table with the business and engaged and involved from the start of any type of strategic goals for the company. I would definitely think that the evolution in the past 10 years has gone in the direction where my team and myself have been high contributors to the business side. And when you’re engaging outside counsel in the region, they’ve also gone in a direction of still acting as lawyers but being also more business-friendly,’ explains Zagustin.

With both Bahachille, Zagustin and Furman all based not in Latin America itself, but in Miami, the question arises whether having legal leadership on the ground is necessary. But Bahachille, dual-licensed in New York and Venezuela, and responsible for a 13-strong team of people based in the US, Brazil, Mexico, Peru, Colombia, Argentina and other Latin American countries, thinks not:

‘We are a global world and technology allows everyone to see what happens around it. I report directly to the global general counsel, and at the same time I am very close to the senior business leaders on different levels. Encouraging regional initiatives is always positive – trying to leverage learnings across markets and influencing the team to work together as one,’ she explains.

Furman agrees that technology is a boon: ‘We use systems to track the status and progress of projects, manage litigation and oversee external counsel spend. We are also implementing a new contract management system that will help us to better collaborate among our legal team situated across the globe and to service our business users.’

Among the most pivotal roles that a regional counsel can play is that of applying specialist local knowledge and judgement to connecting the dots between the region and the global business.

Says Bahachille: ‘The beauty of being an in-house counsel is that we see the whole picture – and if we are not in that place, we have to learn how to do it. Being a regional counsel is a complex and yet a fun role, as long as we enjoy what we do and we are not afraid of standing up for what is right and trying to grow the business at the same time.’