Business Sustainability, Corporate Governance, and Organizational Ethics

CHAPTER 19Legal and Advisory Function

1. Introduction

Legal and advisory function is an important aspect of an effective corporate governance in ensuring that organizations are receiving relevant and reliable legal and financial advice from their legal counsel and financial advisors. The legal and financial advisory function enables compliance with all applicable laws, rules, regulations, and standards as well as the achievement of sound and sustainable financial decisions. The advisory function of corporate governance is important in evaluating the legal, financial, and tax consequences of business transactions. Professional advisors participate in corporate governance by providing advisory services to the company’s board of directors and management. Management has traditionally engaged professional advisors for the structure, measurement, recognition, and preparation of public filing and disclosures of business transactions.

Boards of directors are now hiring professional advisors to assist various board committees with specialized areas risk assessment, cybersecurity, compensation schemes, and the nomination process. These corporate governance participants assist companies in evaluating the legal and financial consequences of business transactions. Professional advisors participate in corporate governance by providing advisory services to the company’s board of directors and management. Management has traditionally engaged professional advisors for the structure, measurement, ...