A UK colleague, Jayne McGlynn (Strategic Corporate Partner, M&A at DWF), recently described a “quiet crisis”: experienced GCs being “restructured” out and replaced by contract lawyers, junior leaders or “AI-powered” alternatives. The same pressures are starting to show up in South Africa. The motive is understandable - reduce fixed costs - but the hidden risk is substantial, and it tends to surface precisely when a board can least afford it.

‍

In our market, the GC (by whatever title - Head of Legal, Legal Director, Chief Legal & Compliance Officer) is the board’s early-warning system and institutional memory. Remove that function and you don’t just buy more external advice - you lose context: who promised what to a regulator last year; which indemnities sit in your legacy contracts; how your risk appetite has been applied in practice. That context is what prevents “surprises”.

‍

It’s also a talent reality: a good GC is hard to find and harder to replace. The best combine judgement with commercial fluency, credibility with the CEO and chair, and the temperament to say “no” early enough to matter. In practical terms, they are a scarce, high-leverage asset whose value is measured in problems that never occur.

‍

For a South African boardroom, a rugby analogy applies well: a great GC is your corporate flyhalf. The No.10 reads the field, calls the play, manages territory and pressure, and decides – instantly - whether to pass, run or kick for touch. That is precisely what a seasoned GC does in complex transactions, investigations and regulatory engagements: read the risk, pick the line, relieve pressure, and put the organisation in the right parts of the field.

‍

It’s also worth remembering that South Africa’s governance framework expects boards to demonstrate robust compliance oversight. King IV makes compliance a board-level responsibility (not a box-ticking exercise) and promotes a “combined assurance” model - coordinating management, internal audit, compliance and external assurance so that blind spots are minimised. A strong GC is a key integrator in that model.

‍

Alongside that, the Companies Act requires public and state-owned companies to appoint a Company Secretary; the role includes advising directors on their duties, making them aware of relevant laws, and reporting non-compliance to the board. In many organisations that function works hand-in-glove with the GC. Hollowing out legal leadership tends to weaken both.

‍

The risk isn’t theoretical. POPIA enforcement has shifted gears: the Regulator has issued infringement notices and fines, with administrative penalties of up to R10 million available in appropriate cases. Competition law exposure is even starker: administrative penalties can reach 10% of a firm’s annual turnover for serious contraventions. Those are headline numbers that turn “savings” into balance-sheet problems very quickly.

‍

What actually happens when a GC is replaced by a patchwork of juniors, contractors and external counsel? Matters still get done, but fewer risks are prevented. You see late flags to the board, slower responses to regulators, fragmented accountability and higher advisory spend per matter. In six to twelve months, the “saving” has often evaporated - and the governance posture has quietly degraded.

‍

Practical Implications (for Boards and CEOs)

Before you act on head-count savings, ask for a risk-adjusted business case. Map the GC’s preventive workload as rigorously as the visible advisory hours. If change is unavoidable, consider an interim GC or a retained “GC-as-a-service” model with clear SLAs, escalation pathways and board access, and ensure the Company Secretary/GC interface remains strong. The core test is simple: who has both the information and the standing to call the play under pressure?

‍

If your organisation is weighing this decision, the team at Thomson Wilks can review options with your Chair, CEO and Audit/Social & Ethics Committees - confidentially and pragmatically.

‍

By Stephen Thomson | Director

‍