For better or for worse, regulation is a mounting concern for companies. Closer scrutiny and a barrage of new rules and obligations in a range of sectors means many operate under a regulatory microscope at local, national and international levels like perhaps never before. Newly empowered authorities around the globe frequently display a willingness to seek and punish rule breakers, and are reaching further afield to bring companies to task for failing to comply with their obligations. Increased cooperation between regulators and enforcement agencies has also significantly increased the risk and penalties of non-compliance.
Today, failing to adhere to new regulations can potentially spell disaster for companies and has pushed governance and compliance higher up the boardroom agenda. Senior executives everywhere recognize the importance of making sure their companies have effective, robust and reliable governance and compliance tools. Such developments mean companies are increasingly recognizing the value of their in-house legal counsel in helping them navigate the complex environment and are increasingly willing to pay for it.
Growing distrust in the industry by local and international governments and civil society organizations has also led some, such as the UN-backed Extractive Industries Transparency Initiative, to develop industry guidelines designed to encourage greater openness in reporting revenues from natural resources. Last year, the US Securities and Exchange Commission also introduced new rules designed to make it easier to track money paid to governments by companies in the extractive sector. Such developments are a reflection of the complexity faced by companies in the industry at large, which has contributed to GCs in thi sector receiving the highest average wages in the region at US$180,000. "Heavily regulated industries usually look for lawyers with industry experience since that enables them to create a positive impact right away," says Barrett Avigdor, managing director at legal recruiter Major, Lindsey & Africa. "Lawyers with industry experience are relatively scarce, so they command higher salaries."