What's the supposed rationale for the General Counsel reporting to the CFO in the first place? Isn't a General Counsel supposed to be "general" and not only concerned with financial issues?
Fortunately I/T seems to be on it way out, though regrettably slowly.
I am referring to "I/T" as a corporate computing function within the company, a function which often hiders rather than accelerates the business.
I/T typically picks technologies which are easier for I/T. Hence there's a corporate standardization on one mail system, one OS; very strict upgrade cycles etc. This kind of made sense in an earlier era when computing wasn't really integrated into the business processes -- people would be "on email" and if the icons changed an expensive "training program" had to be rolled out because the majority of working people had a passive aggressive learned helplessness towards computers.
What happened is that people became more savvy and worked around I/T. First it was the PC: the appeal of the Apple II was that you could buy one, add a copy of Visicalc, plunk it down on your desk, and get work done without dealing with those assholes in I/T. I/T (this is before CIOs etc) fought back (just look at magazines like Datamation from the 1980s to see; I am not exaggerating) and took control of the PC infrastructure. Around 2000 departments would start to put in wifi access points and local file servers under secretaries' desks to just get work done. I/T again was seen as a barrier.
Nowadays I/T is freaking out about "BYOD" because people wouldn't put up with the crappy company-issued blackberries etc. But it is making business more efficient and humane.
You could see the nails entering the coffin for a long time, but these things take time. When I was at MIT in the 1980s I would get a laugh when I would run across a piece of literature from MIT's I/T department about the computing crucial capabilities they provided to MIT -- because they had nothing to do with the systems we depended on in the research labs which were mature and two generations beyond what I/T offered. And even now, heavily computer-intensive businesses often have disjoint departments and technologies for their customer-facing work and their internal systems (a few huge products like Oracle are rare exceptions).
However, that's not because that's what we wanted to do. That's because someone had the bright idea to bring a paper to the CEO, and he said "We can't just have everyone accessing every damned file!!!"
Believe me, it's just as rough being the enforcer as it is being the one being enforced!
However, I think we'll need people to fix computers, update the servers, and wake up at 2AM to put a fan in the server room ;)
I'd say the exact opposite. If the GC is spending most of his time making sure that the CFO isn't doing anything illegal, the GC needs to report to anyone other than the CFO.
Some companies have every C level executive reporting to the CEO.
Some CEO's are big picture people and focus on external issues. This means that the company would usually have most functions reporting to the COO.
Sometimes it just makes sense to have a group report to an executive. Consider Groupon, its largest expense is marketing so it might make sense to have the Chief Marketing officer report to the CFO. It can also make sense for financial companies to have the Counsel report to the CFO as they would be doing primarily financial related duties, like compliance.
General Counsel is a special case as its a bit of an oddball case for companies where its not a core function and will often report to the COO.
IT can often be like the general counsel where it's not viewed as a core function or PnL center and thus report to another C level executive like the CFO or COO.
this is THE classic example of corporate sociopathy. unfortunately its still the way a lot of companies do business.
The story in the article is a great example, I don't think the CFO thought that she was breaking the law. It was a practice that she had engaged in previously, it was vetted by a big-5 accounting firm, and benefited the employees. The CFO was widely respected in the industry -- this wasn't some flimflam person or sociopath.
When your attorney works for someone else, that other party becomes the client. If you, as a CEO (or an individual) are ultimately accountable for the outcome of your decisions, you want the attorney working for YOU, so that you get unfiltered information to drive decisions.
regarding that CFO from the linked article though, the federal prosecutor seemed to believe she was a criminal, and proved it enough that a jury agreed also and she eventually served jail time. we're not mind readers so we don't know how she felt about her actions, but honestly, it kinda looks to me like she really was a low level sociopath. just because she was surrounded by people who reinforced and validated her behavior doesn't mean she was acting morally.