2021 Corporate Governance Checklist for the Canadian Corporate Legal Department

Corporate governance and corporate law often overlap due to the regulations that Canadian companies must follow. These range from common law to provincial statutes to stock exchange requirements. The corporate legal department is usually responsible for ensuring that actions the company takes are in compliance with all of the policies and regulations which govern corporate governance.

2021 Corporate Governance Checklist for the Canadian Corporate Legal Department

In the age of COVID-19, corporate legal departments have had to deal with a number of pivots to company policies and practices, many of which had to be vetted against different sets of regulations and policies. The Canadian corporate legal department is working harder than ever, and often with limited resources. In addition, makeshift solutions may have been put in place in March 2020 which need to be updated to ensure security, usability, and efficiency. Working remotely is how most businesses are operating now and well into the foreseeable future.

In-house counsel at BDO Canada LLP, Christina Porretta, has had to face the challenge of pivoting for the pandemic. “I think the key to any organization thriving and surviving in challenging times is just to be adaptable and to maintain the same caliber of work.”

All of these factors have combined to make digitization an absolute requirement for the corporate legal department, rather than a “nice to have” item. Contracts are no longer being signed in-person, cases are being considered electronically, and all of these documents must be transferred in a secure fashion and made accessible for your team to work on them from home offices.

Here is a checklist for items the corporate legal department should consider over and above the typical rules and policies it has to follow.

Checklist Item 1: How does remote work affect the company’s corporate governance and risk profile?

Many office workers are choosing remote work in order to reduce the spread of COVID-19. Remote work can expose the company to numerous cybersecurity risks.

The Canadian Centre for Cybersecurity, a department of the federal government, released a notice in July 2020 about increased network attacks against Canadian infrastructure. Some of the remedies it gave included ensuring that employees were using two-factor authentication (2FA) to log into networks and ensuring that all software solutions had been patched to their latest versions.

What this means for your legal department

The legal exposure from a cybersecurity breach is potentially very large. The legal department should furnish management and the Board with a list of the regulations, both nationally and internationally, which govern the behaviour of the company in the event of a breach. This could help to inform a proper cybersecurity policy. A complete list can be found here.

Checklist Item 2: Make sure you have a seat at the boardroom table

Ultimately, the general counsel’s chief client is the Board of Directors. This is because the board represents all stakeholders in the company. Without the input of general counsel, the board is opening the company up to risk. Since one of the board’s main purposes is risk management, it is in its best interest to ensure that the corporate legal department is represented by the General Counsel or the Chief Legal Officer at each board meeting.

What this means for your legal department

Above all, the head of the legal department should already be at least presenting a report to the board on legal issues for the company. In volatile times, it may be up to the head of the legal department to reach out to the board to suggest attendance at each board meeting to be available as a resource, as board members may have too much on their plate to consider this.

Checklist Item 3: Is your department using makeshift technology solutions for remote work?

Due to the “going into overtime” nature of working in a legal department, most corporate legal departments already had staff set up to work from home prior to the pandemic. However, working in a hybrid setting of the office and home rather than just at home meant that employees had access, pre-pandemic, to certain things in the office they did not have at home.

In March 2020, most legal departments solved these technological issues, but those solutions may have been hastily put in place and may not have been the right ones. Good corporate governance requires that contracts and other documents are handled in accordance with regulations, common law, and all of the other things your department is concerned with.

What this means for your legal department

Temporary solutions for digitizing contracts, for example, may have been set up. Therefore, better more secure solutions may need to be looked at as digital contracts – and everything else, for that matter – are how contracts and other legal issues are managed going forward. Secure management and collaboration using an electronic legal management suite is the best solution, as these suites typically have everything else built-in that a corporate legal department requires.

 

DiliTrust has been recognized as a Representative Vendor in Gartner 2020 Market Guide for Enterprise Legal Management Solutions (ELM). Find out how we help  CLOs, General Counsels, and In-house Counsels to achieve best practices in their day to day corporate governance with our enterprise legal management solutions. Talk to a member of our dedicated Canadian team to arrange a free demonstration

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