The Invisible Asset: How the Rule of Law Drives Ethical Corporate Value

Why is legal knowledge still seen as a constraint rather than a capability? And what if one of the most underutilised assets within organisations could shape strategy, culture and long-term value creation? 

In this session of the Dean’s Distinguished Speaker Series, Professor Robert C. Bird, Professor of Business Law and Eversource Energy Chair in Business Ethics at the University of Connecticut, reframed the role of law in organisations. Drawing on empirical research and his recent book Legal Knowledge in Organizations: A Source of Strategic and Competitive Advantage, he argued that legal knowledge is “the last great untapped source of competitive advantage” and can move beyond compliance to drive ethical corporate value. 

The lecture was opened by Associate Professor Victor Yeo, Head of the Division of Business Law, who highlighted how legal knowledge can be viewed as an asset that supports governance, decision-making and sustainable value creation. The session was moderated by NBS alumna Dr Jin Soojin Gan, who brought perspectives from her experience across business, law, technology and public policy. 

The following is an edited transcript of the Q&A segment: 

Dr Gan: Many organisations still view law primarily as a defensive mechanism. From your research, what traits should organisations encourage to evolve legal knowledge from a “check-the-box” mindset to a strategic capability? 

Prof Bird: It is not an easy path, and it takes time. Lawyers need to “code switch”, which means speaking in the language of their audience. When engaging finance professionals, they should refer to firm metrics such as stock performance and returns. When engaging managers, they should talk about strategy, culture and organisational goals. 

Lawyers also need to listen and understand what their colleagues are trying to achieve and then show how legal knowledge can help. It is equally important to find allies within the organisation. You do not need to convince everyone, but you need enough support to demonstrate value over time. 

At the same time, lawyers must not abandon their core responsibility. They should not become “captured” by business interests. Respect for the rule of law must remain central. 

Dr Gan: Your lecture connects legal knowledge to ethical corporate value. What practical steps can leadership take to strengthen ethical decision-making? And is ethical decision-making still relevant today? 

Prof Bird: Leadership should work with the “culture keepers” in the organisation—lawyers, compliance professionals and risk managers—to define and reinforce values. Ethics is difficult to build and easy to lose. 

Ethical decision-making is relevant. When the rule of law erodes, markets become unstable and societies suffer. Free markets depend on strong institutions, including education, clean government and the rule of law. 

Each organisation and individual has a role to play. Rather than reacting to uncertainty, we should actively uphold ethical standards and social responsibility. 

Dr Gan: There is often tension between business decisions and legal considerations. How can organisations address this in practice? 

Prof Bird: It requires perspective-taking. Lawyers and managers need to engage with each other directly and consistently. Over time, these interactions build trust. 

Legal experts should be involved early. Decisions are like concrete—soft at the beginning, but hard later. Bringing lawyers in early allows them to shape decisions constructively, rather than disrupt them after they are fixed. 

There is also a broader issue of education. Some business graduates lack legal literacy, which creates risk. Organisations should value legal and ethical knowledge alongside technical skills. 

Dr Gan: Why do organisations struggle to adopt a strategic view of legal knowledge, despite the benefits? 

Prof Bird: It comes down to training and mindset. Business professionals are often trained to think quantitatively, while lawyers approach problems differently, focusing on interpretation and reasoning. 

There is also perception. Lawyers are often seen as a cost or an obstacle, and lawyers themselves may default to saying “no” because it is the safest response. Bridging this gap requires effort from both sides. 

Dr Gan: Can you share examples of organisations that demonstrate strong legal awareness at a strategic level? 

Prof Bird: Organisations that emphasise ethics and corporate social responsibility tend to demonstrate strong legal awareness. Companies such as Patagonia are good examples, given their commitment to sustainability. 

Similarly, large professional services firms and highly regulated industries, such as pharmaceuticals and finance, often develop more sophisticated legal capabilities. 

Dr Gan: How can organisations cultivate a culture where managers develop legal awareness, rather than delegating it entirely to legal teams? 

Prof Bird: Culture is critical and must start at the top. Leaders need to demonstrate respect for the rule of law and embed it into organisational values. 

Over time, through consistent behaviour and shared responsibility, legal awareness becomes part of how decisions are made across the organisation, not just within the legal function. 

In closing, Professor Bird emphasised that legal knowledge should not be confined to compliance. When embedded across the organisation, it becomes a strategic capability that shapes decision-making, strengthens culture and creates long-term value. 

The message was clear. Organisations that treat law as a cost will limit their potential. Those that recognise legal knowledge as a strategic asset can unlock a powerful and sustainable source of competitive advantage. 

Download the slides here, and watch the webinar here: