A recent Deloitte Financial Advisory Services LLP poll of 1,300 business professionals found that nearly two-thirds of respondents believe that market volatility has driven increased collaboration among C-suite executives. A significant percentage – 41 percent – reported that the collaboration between the GC and CFO at their companies is high, while 25 percent said the GC-CFO collaboration is occasional. Only three percent said it was nonexistent.
Respondents disagreed when asked in what situations this collaboration mattered most. Thirty-four percent said there should be strong teamwork regardless of market conditions, while 27 percent said teamwork is needed only during an economic downturn when organizations experience higher layoffs and need to manage debts or collections. Another 25 percent said periods of business growth and expansion – where there are likely more mergers, acquisitions, and hiring – require the most collaboration.
The authors argue that companies that don’t foster collaboration between finance and legal are risking a competitive disadvantage, and they suggest practicing consistent inclusion. They say GCs should be involved and integrated in initial discussions on a transaction or issue.
They also advise developing cross-functional specialization. By knowing the business, GCs become specialists on what is most important, and this allows them to make cross-functional decisions. GCs should be brought in on discussions about tax matters, M&A and cross-border transactions. They will benefit from the information, and the organization will benefit from the breadth of their views. This teamwork is important through every kind of business cycle.