Ethics and professionalism: Professional obligations come first

Cheryl Foy on navigating ethical dilemmas in-house

Cheryl Foy

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QUESTION: I’m a GC. My CEO recently misled the board and I think it’s significant. The CEO discourages the executive team from communicating with the board and wants to know when we do. I’m losing sleep. What do I do?

FOY: There have been several points in my career where I was faced with a decision like this. In one of those situations, I made the decision to resign, but when I next showed up to work, my CEO had decided to follow my advice. In the other scenarios, I tried my best to follow the advice laid out below:

Our duty: We know that an in-house counsel’s client is the corporate entity or organization and as such our obligations to the organization transcend any relationship with any employee including the CEO. I’ll refer to the Model Code of Professional Conduct on which most of our provincial codes of conduct are based. There are specific provisions that help you if the client is an organization. These provisions make it clear that the organization is your client — not the CEO. 

You are obliged to notify the CEO that the misrepresentations to the board must be corrected. In the best-case scenario, the CEO agrees and the two of you ensure that the misleading information is corrected. If the CEO doesn’t agree, you should advise the CEO that you have an obligation to make the board aware that they have received misleading information from the CEO. You then need to raise the matter with the board. If you have any relationship at all with the chairperson or another trusted board member, ask them to assist. However, don’t set yourself up for a dynamic in which one board member decides to sweep the issue under the rug because that will make your situation even more difficult. 

Note that even if the CEO agrees to correct the misleading information, you may have an obligation to inform the board of your work behind the scenes to address the matter. It may be that the board views the misrepresentation to be such a breach of trust that it warrants discipline, including termination of the CEO’s employment. 

Often, what makes these situations so very difficult is that CEOs don’t understand our duties or they equate their interests with those of the entity. Our CEO may see us as an employee like any other — we aren’t. In this scenario, your CEO has created barriers to your ability to act in the best interests of your organization and to fulfil your professional obligations. Your professional obligations trump all else. If you must choose between preserving relationships and doing the right thing — do the right thing — your reputation and the rest of your career depends on it. 

Facing the worst-case scenario — courage, mon ami!: Neither of us is blind to the fact that you may get fired in this scenario. I can envision a less-than-healthy environment in which both the board and the CEO support terminating you for not being a team player. This is the part where courage plays a role — we cannot do our jobs without it. As difficult as it may be, you need to do what needs to be done and accept that you may lose your job. Even if you don’t lose your job, start looking for another one. Life is too short and your reputation is too important to risk by working in an environment like this one. 

Taking care of you: It is important to recognize that scenarios like this one place in-house lawyers in very difficult situations and are a significant source of stress. It is difficult to be alone in making these judgment calls about what to do and when to do it. It is extremely difficult to take our own interests in maintaining good relationships and in keeping our jobs out of the equation. Recognize that these situations call for the highest level of judgment, objectivity and courage and are thus very stressful to manage. Take steps to acknowledge the effects on your stress levels and health and take steps to manage the stress by taking care of yourself and getting support.    

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