Photo by Gregory Cowley.
Michelle Banks has been with Gap Inc. since 1999, when she joined the retailer from an in-house legal position at the NBA’s Golden State Warriors; she became the retailer’s general counsel in 2006. Prior to Gap Inc., she was also an American counsel for ITOCHU Corporation in Japan, and worked in private practice.
Banks serves on the Executive Committees of the Boards of Directors of the Minority Corporate Counsel Association and United Way of the Bay Area. She is also chair of the General Counsel Forum of the National Retail Association and serves on the American Bar Association’s Commission on Women in the Profession.
Lawdragon: Let’s talk a bit about succession planning. Why do so many companies bring in GCs from outside? There’s often a desire to replace a GC with someone who has GC experience. Do you have any thoughts on why that’s so prevalent?
Michelle Banks: I think it’s usually driven by the board – the board of directors may feel more comfortable with someone who has been tested and demonstrated success in the role. Often when I’ve seen peer company GC roles open for a time, the board has expressed a specific interest in hiring someone who has been a general counsel. They don’t want to take a chance on someone’s first gig.
LD: Now that you see more movement from private practice to in-house, will boards consider law firm partners as well?
MB: In my industry, it’s fairly rare for a law firm partner to become a GC. When I see that, it’s usually with smaller companies and when the person has been the outside counsel for the company. They may have a good relationship with the CEO, who may want their lead outside lawyer to become their lead inside lawyer, but there's little about being a law firm partner that prepares you for being a general counsel – it’s very different!
LD: What are the advantages for a company of promoting from within the legal team to the GC role?
MB: There’s a huge advantage to knowing the company, the industry, the business, the strategy, the financials, the people and the culture. Otherwise, there is usually a substantial transition time. The advantage of promoting from within is the person is much more likely to hit the ground running leading to a faster transition.
LD: How much does it lead to attrition of good people if internal candidates are overlooked?
MB: I think if there has been a formal outside search for a new GC and an internal candidate has been considered but overlooked, he or she is likely to leave. Also, if there hasn’t been a process, but there have been senior people internally who have felt that they are ready and someone is hired from outside they are also, in my experience, likely to leave. It’s not always the case, but I have seen a number of examples of that over the last few years.
LD: Are there ever any disadvantages to promoting people from within? Are there challenges that internal candidates face that an external candidate might not?
MB: I don’t see this as a disadvantage for succession planning, as I am a strong advocate for it, but I think if you never hired from outside at any level your company might become very insular. If you do a lot of promoting from within, but you look outside for either a newly created position or a position that becomes open at a time when there is no one ready in the department, I view that as a positive – new perspectives and ideas are helpful.
LD: How can succession planning be successfully integrated with a company's diversity policy, as there’s a certain overlap with mentoring?
MB: When we do our annual succession plans and talent reviews, we use a diversity focus as part of that process. We look at our talent and our bench to see how diverse it is from a gender, ethnicity and race, and other perspectives. We have diverse employee resource groups at our company. We also have mentoring and talent development programs that are not specific to just women and minorities. Lastly, and this is important, we have a lot of training available, including cultural awareness training and micro-messaging training.
That’s important because if you ask leaders to use a diversity filter in their talent development and succession planning, not everyone is fully equipped with what that should look like. We offer training to help leaders be more effective in managing their diverse talent pool. Also, if you just identify who is on your bench, but you don’t have any programs to support them, then they may or may not succeed. We have mentoring and training programs to help ensure our talent moves along in an effective way. At the same time, we educate leaders on how to create inclusive environments, so that diverse employees want to work here and they can see that there’s a way for them to succeed here and leaders are treating everyone in an inclusive way, no matter how similar or different.
LD: Yes, if the definition of success that you’re using is a white male definition then you’re always going to get more of those succeeding or you have to emulate that identity to succeed according to that definition of success.
MB: Yes, the challenge in law firms is having the token woman – the executive committee might have one woman, the compensation committee might have one woman. I believe you have to try to build both a diverse employee population and a diverse management population. Law firms have always been challenged in that area, particularly at the most senior levels. I strongly believe robust succession planning could help them.