Role of a Corporate Lawyer
Introduction:
Do we agree or not that the traditional approach of correctional justice by litigation and arbitration is almost failed because of its time and cost consumption, non effectiveness, instability, relation spoliation in the human society. Day by day, new institutional and legal dimensions are emerging from the developed worlds. Emerging and underdeveloped groups of countries are not being able to follow the wanted and unwanted guidance. As an example, the WTO remedial mechanism and valuable corporate governance principles can be taken into consideration. Mostly the emerging and least developed countries of the world are always in pressure from the international community and of internal mismanagement. The developed groups of the countries knowingly or unknowingly putting their pressure from anywhere, for the betterment of their own and even of the emerging LDCs, but the pressure is being unbearable rather to be inspirational to them. All emerging and least developed countries don't have their creation to strengthen corporate system. 'Company' itself is not their origin-even in this 21 century; it seems unusual and strange in the emerging countries.The meaning of terms 'corporation' and 'company' is same and the word 'COMPANY' has its Latin origin-that-'company' is derived from two Latin words i.e, Cum and Panis, (Cum+Panis=Company) which denote “breaking bread together”[1] and it seems social centric. The term 'corporation' simply known as a legal person having subject of right and duties capability of owning real property, entering into contract, suing and being sued in its own name separate and distinct from its promoters and shareholders. The next word 'Governance' has also been derived from the same origin of Latin word of 'gubernare' which mean to rule, and comprises of a process, structure and relationship through which the board oversees what the executives do.[1] All over the world, the companies and corporations are wealth producers. Where they are originated, their conceptualization feedings and take care methods naturally be borrowed from the same place without any distortion. If tried to distort the peculiarities that will damage the merits and charms of the company. Hence conceptual clarity is inevitable but the clear concept may not have developed in turn of the first company.
Wondering fact: World frist company:
The 1st company of the world-Kongo Gumi Company, Japan,
· Etabilishedment: 578 AD,
· Established by: Korean people,
· Types of Business: Construction
· Nature of work: Buddhist temples building.
· Continuously run: For over 1,400 years
· Went into liquidation: January 2006
· Headquartered: Osaka, Japan
In terms of concept the corporation itself is a strange and unique one. It is a creation and imagination of the Common Law. Generally the corporation is known as a legal fiction. In the same manner the US Common Law Court headed by then Chief Justice Marshal has defined the corporation as "A corporation is an artificial being, invisible, intangible, and existing only in the contemplation of law. Being a mere creature of law, it possesses only those properties, which the charter of its creation confers upon it, either expressly or incidental to its very existence"
The corporation has to create, perform and long run on the basis of legal philosophy. Laws relating to its creation and performance are only the procedure which are explicit and lay down in letter but the basic backbone is the philosophy which may not be found in law, in black and white. All the philosophy as well as the procedural law in black and white are co-related. Any literate person can read the black and white letter of laws but he may be unable to understand the philosophical part of the corporation, which is very important in corporate governance. Turning the definition of corporate governance the terms "Corporate Governance" denotes the rights and responsibilities of corporate actors within the corporate framework. A company should have various players to govern the corporation, such as shareholder, directors’ staffers and employees, other stakeholders and society at large. Every concern parties should work smoothly and effectively with making harmonious relation between each other to fulfill the objectives of the corporation which is core concept of corporate governance principles. Indeed Corporate governance refers to the structures and processes for the direction and control of companies. Corporate governance concerns the relationships among the corporate actors. But the main actors is corporate lawyer. He must have to know the role for himself.
Indeed Role of lawyer in corporation is as social engineering but it has to be recognized by heart of every lawyers. If so, every corporate lawyer must have known that:
Purpose of Incorporation: Corporate incorporation is to harness private interests to serve the public interest that why does society create laws and that allow corporations to exist? Of course to serve the general welfare- should be the purpose of all democratic law. Corporations have a unique role as private organizations, created by those motivated to create wealth and rewarding livelihoods for themselves through the production of goods and services. Prof. Greenfield rightly has observed that the Corporation is an instrument to serve the collective good[1].We must retain private interests as a major engine of economic prosperity. Historically, the corporation was a public institution with public purposes; shareholder primacy is a historically recent phenomenon.[2] At the same time, we must insist that corporations concurrently serve society and protect the biosphere, which are the foundation of all future wealth creation. Thus, all corporate actions must be consistent with the public interest, and where private and public interests conflict, the public interest must prevail.
Corporate Social Responsibility: As a member of this human society corporations have to discharge duties towards the human right environment rights, anti-corruption rights and the rights of the labour.[3] Corporations shall increase fair returns for shareholders, but not at the expense of the legitimate interests of other stakeholders. Investment and profit generation is vital to a well-managed company. Yet corporations may not pursue profit for shareholders by undermining the legitimate interests of other stakeholders. Corporations must, however, incorporate legitimate stakeholder claims in their decision-making. The legitimacy of stakeholders’ claims derives from their role as providers of human, natural, social, and financial capital to the corporation. Issues linked to this principle include, for example, how each corporation deals with consumer safety, workplace conditions, wage standards, pollution regulations, and community social impacts must be considered.
Consideration for the future generation: Corporations shall operate sustainably, meeting the needs of the present generation without compromising the ability of future generations to meet their needs. Vital to the public interest – vital to all life – is the stewardship of the biosphere through preservation of natural resources and protection of common assets such as clean air, water, and the earth’s climate. As stewards, corporations must not abdicate their long-term public responsibility in pursuit of short-term private gain, as they have in the past. Climate change is the most compelling example. The existence of most corporations has depended, directly or indirectly, on selling products and services that are unsustainable from a climate change perspective. Thus, operating sustainably in the future implies for many corporations dramatic change in the nature of products and services, so as not to compromise future generations. Issues linked to this though include various privatizing process, decreasing energy use, reducing pollution, and designing sustainable productions and so on are good solution.
Wealth distribution to the contributors: Corporations shall distribute their wealth equitably among those who contribute to the creation of that wealth. Prevailing norms of corporate governance and fiduciary duty make shareholder wealth paramount. Gains to other stakeholders – wages for employees, payments to suppliers, and taxes to local and national governments – are perceived as costs to be minimized. In contrast, a corporation designed consistent with recognizing its obligation to distribute wealth equitably among parties who helped create that wealth. Mainly three contributors- State or society, Human capital and Capital investors role[4] in a corporation is vital important and without their contributors corporate existence will not be possible.
Govern the corporation as discipline manner: Corporations shall be governed in a manner that is participatory, transparent, ethical, and accountable. Participatory governance must empower stakeholders at all levels of corporate decision making in ways that seldom have occurred in the past. Through decision-making that is transparent, ethical, and accountable, affected parties can be informed, heard, and respected. Appropriate governance is a key mechanism for implementing all other principles. Issues linked to this principle include, for example, corporate board and committee composition, election and removal of board members, stakeholder councils, public reporting, management of ethics, and checks and balances on management power.
Respect Human rights and fundamental rights: Corporations shall not infringe on the right of natural persons to govern themselves, nor infringe on other universal human rights. Primarily concern the functioning of the corporation in relation to its internal and external stakeholders should be careful to protect broader political rights of citizens. It sets a limit that corporations must not transgress: the rights of natural persons to govern themselves. Corporations must not exceed their proper role in democratic political processes, and must respect norms that limit their influence even to the lawmaking issues linked to this principle include, for example, corporate constitutional rights, lobbying, ownership of the media, and campaign finance too.
Thus the lawyer has to perform their duties as following.
As a consultant: - This role of lawyers is as advisory services. When the corporation asks any issue the lawyer can provide consultation services. The trade in legal services under the GATS / WTO classification on legal services has classified mainly 6 class under which one classification is advisory services. The advisory services reflect the consultation services. These types of services depend on request of the corporation. When corporate authority want to have a legal idea he can ask and corporate lawyers will provide their advise on corporate legal matters. Within this role the lawyers do not involve in corporate matter exclusively, he just plays the role of advisor. If corporate authority asks the lawyers they have to provide consultation services as a consultant.
As a corporate interest keeper: - corporate interest reflects from corporate objects. Every corporate authority has to perform within the limitation of corporate objects. If any corporate authorities acts beyond the objectives limitation that is ultra virus. The corporate lawyers’ main duty is to preserve corporate interest. Some time corporate stakeholders as well as other corporate actors may encroaches the very interest of the corporation. As a well-known and inevitable actor of corporation the lawyer must have to work as interest keeper of the corporation. The roles of lawyers are to be formulated on concern laws, code and principles. If they across the boundary of the laws, code and principle they should be responsible
As a reconciliatory between other corporate actors. The corporate lawyers are effective corporate actors. Among all corporate actors lawyer are well aware on the Memorandum Of Association (MOA) and Article Of Association (AOA) . They better know the concern laws and the legal philosophy relating to the corporation. The lawyers who are aware on corporate governance obviously they know the rights and responsibilities. In this situation the lawyers should have to work as a reconciliatory between the corporate actors.
As a facilitator: - The corporate lawyers should have to work in a corporation to facilitate every actors and unit of corporation. They have to work according to their responsibilities of facilitator. The law and legal duty itself is a technical job. Entire goal of corporation is good corporate governance. To achieve the goal every corporate actors, authorities and unit need to be aware and performs their duty and the lawyers have to facilitate to the same. He can spread his knowledge and make all the function of corporation compatible with the laws and legal philosophy. The facilitating role of a lawyer is well recognized. The corporations need to use the bundle of laws, which are complex, unclear and ambiguous and the lawyers, make that understandable and workable shape as performing the role of facilitators by the corporate lawyers.
As a legal representative of corporation: - The lawyers must head always the legal department of a corporation. All corporate actors and authorities must have to rely on qualified and efficient corporate lawyers. The legal issue within the corporate relation with every sector of society the lawyers have to represent. The lawyers must represent domestic corporate relation and societal, national and international matter of relation. He is inevitable component of corporation. If any corporation is going without qualified corporate lawyers the corporation is going to fall in verge of collapse. He must have to represent in every stage and sectors of legal issue. That is his responsibilities as well as rights of lawyers, but our country is facing the liability and inability crisis from lawyers concurrently.
As a gatekeeper: - After the emergence of corporate governance principle and practice in the world the lawyer is pointing out as a good gatekeeper. In case of corporate irregularities the lawyers know the possible situation first .As a corporate lawyer he must be ready to act as a corporate gatekeeper. The corporate jurist Stanley Beck argued that it is irrelevant that gatekeeper liabilities would not be infringe the traditional relation of the lawyers and clients relationship because regulator should engaged in efforts to change that relationship.[1] Any lawyers may have entered in to corporation through a relation with a single person but after his entrance his relation would not be same to the person rather to the corporation. His duty goes ahead on the interest of the corporation without any bias and favour of any one. If a lawyer played the role of corporate gatekeeper he can check the corporate scandals but this role of lawyers is in controversy because some traditional thinkers has said that the relation between lawyers and client infringe by the role[2]
As a whistle blower: - The lawyers as a effectively aware and have known the weak points of governing rules he will know first the lapses. Fairly and impartially if lawyer play the role of whistle blower the irregularities will be eliminated easily but there is a controversy on this role in 1975 American Bar Association considered recommendation that lawyers should be obliged to whistle blow and at the same time denounced the prospect of turning lawyers into gatekeepers. But now these days has been changed that the ABA has obliged to prevent the SEC from imposing noisy withdrawal obligations on lawyers under the new Atomic conduct Rules professor coffee has a failure of professional gatekeepers exempts lawyers from his definition of a gatekeepers.[3] Whether these two roles are in debate but if the lawyers play the role it would be effective and enhance the corporate governance.
If we are agree on the above presentation please try to follow our duty as well. If you are not agree let us discuss and try to enhance global corporate legal and and corporate governacne mechanism strongly.
