Succeeding as a strategic business partner: Insights from Ally Financial’s general counsel

In this podcast, Heidrick & Struggles’ Victoria Reese speaks to Scott Stengel, the general counsel at Ally Financial, a US-based bank holding and insurance company. Stengel discusses the greater ownership general counsels are now taking in the enterprise, and how he has been navigating the growing complexities of the regulatory environment and the role as well as becoming more of a strategic business partner. He also shares his plans to further Ally’s progress on diversity, equity, and inclusion, and how he is driving an inclusive culture in a hybrid work environment, both within his team and the broader organization.

Some questions answered in this episode include the following:

• (1:12) We continue to see general counsels take greater ownership in the enterprise and be strategic partners. Can you share your experience navigating this shift?
• (3:11) Over the past two years, your role has grown more and more complex. A legal team needs to have expertise on so many matters and be constantly learning. How do you decide what expertise you need to have yourself and in your team versus the expertise you can rely on fellow business partners for? What advice would you give to other general counsels in this area?
• (4:42) Diversity and inclusion is a core value for Ally Financial. What are your plans as general counsel to help further Ally’s progress on DE&I?
• (7:25) Are there any specific tactics to create inclusive cultures that are working? Anything specific to the legal function compared to the broader organization?
• (9:26) Looking ahead, which specific leadership skill sets and capabilities will be most important for your company to meet its strategic goals?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Victoria Reese: Hi, I'm Victoria Reese, partner at Heidrick & Struggles and the global managing partner of the Corporate Officers Practice. In this podcast, I'm talking to Scott Stengel, general counsel at Ally Financial. Ally Financial provides services including car finance, online banking, corporate lending, vehicle insurance, mortgage loans, and electronic trading. Scott has been with Ally Financial since 2016 and oversees all of Ally’s legal affairs. He's also responsible for Ally’s corporate secretarial and government relations functions. Scott, welcome, and thank you for taking the time to speak with us today.

Scott Stengel: Thank you, Victoria.

Victoria Reese: We continue to see the general counselstake greater ownership in the enterprise and be strategic partners. Can you share your experience navigating this shift?

Scott Stengel: Sure. And I most certainly agree with the observation. And it’s crucial, I think, to consider it from the perspective of CEOs and boards of directors—what are they experiencing that’s prompting this? First, I think it’s the pace and complexity of change in our societies, which is being matched by the pace and complexity of changes in the law. And these changes so often have material impacts on our business, financial, and operational plans. An extraordinary example is the vaccine testing and mask mandates that vary even by locality. But pick any industry—financials, energy, industrials, technology—in the day-to-day, we'll find the law complicating more than it's simplifying.

Second, we're living through extreme whipsaws in the law. Regulations adopted in one administration seldom survive the next one. And then a new administration's regulations are almost instantly subject to litigation. How can companies strategically plan and execute in this environment?

And perhaps third, the consequences of violating the law have become more draconian for organizations, and individuals, too. But business is all about taking risks—not only economic ones but also judgments about how to comply with laws that are rarely clear. It's hardly surprising, I think, that CEOs and boards want more from their GCs. And from that vantage point, it's all just a valuable reminder that we're not being asked to solve legal problems; we're being asked to help achieve strategic objectives. Not many CEOs and directors, I expect, are keenly interested in some exposition on the inner workings of ERISA (the Employee Retirement Income Security Act). Instead, they're interested in how compensation and benefit plans can be improved to attract and retain talent. We can nerd out on the law among ourselves, but for our companies, we need to demystify it.

Victoria Reese: General counsels also have to be extremely adaptable. Over the past two years, your role has grown more and more complex given the pandemic, renewed calls for racial and social justice around the world, and the anticipation of increased regulatory scrutiny in many industries. A legal team needs to have expertise on so many matters and be constantly learning. How do you decide what expertise you need to have yourself and in your team versus the expertise you can rely on fellow business partners for? What advice would you give to other general counsels in this area?

Scott Stengel: You've answered it, I think, in the reference to adaptability. If I've built and nurtured deep and authentic bonds with my peers throughout the organization, if I've thought about their priorities as my own, if I've truly listened rather than just heard them, nearly always, I think, I have the right team assembled.

In my experience though, expertise is less central than character. Are the folks on our team obsessed with doing the right thing for customers? Are they resilient, intellectually curious, entrepreneurial, accountable, selfless? On our team, sometimes we'll even go so far as to say heroic. I'm the GC of a publicly-traded financial services company. So of course I need lawyers who are strong in securities banking and such. But for myself and my peers at Ally, these other traits are the difference makers. I can lean on outside counsel for expertise, but not for these. And when compliments come our way from counterparts in the business, these traits are what they call out.

Victoria Reese: Diversity and inclusion is a core value for Ally Financial. Your CEO, Jeffrey Brown, was among the 150 of more than 2,000 CEOs to be part of the CEO Action for Diversity & Inclusion pledge. What are your plans as general counsel to help further allies progress on DE&I?

Scott Stengel: JB, our CEO—he's a firm believer that if you hire the right people, the right results will follow. On DE&I, our legal and government relations team have without question proven that to be true. I'll touch on just a few highlights if that's OK, but this is on their behalf, rather than only my own.

Calls for racial and social justice are nothing new. The volume being turned up on them is also not new, nor is that volume eventually being tuned out. During these last couple of years, we've been focused on sustainable action, on retaining momentum. So, we created a formal social justice council, a team to ensure that we have the framework in place to continue pushing for progress. The council has three pillars. The first is called “See, support, educate and engage.” Here we're focused on one another: listening, understanding, and supporting—all authentically, in hard conversations. We know we have different perspectives. We have different experiences, and we certainly don't always agree, but we're leveraging our differences to grow closer, not farther apart.

The second pillar is “Pro bono.” Here we're hoping to attend to the marginalized in our communities—those without a voice, those whose voices are drowned out. We're leaning on our law firms for partnership. COVID-19 has slowed us down a little, but I continue to just be thrilled about where we're heading.

We refer to the third pillar as “Investing in the next generation.” Here we're collaborating with the Congressional Black Caucus Foundation and have a whole lot of gratitude for them. We sponsor four Ally legal scholars who will begin law school in the fall of 2022, and we have up to $20,000 for each of them each year, based on need. We're also sponsoring two Ally public policy scholars who will begin their junior or senior years in college in the fall of 2022, and we have up to $10,000 each for the year. But these are just our first cohorts. We'll add four more Ally legal scholars and two more Ally public policy scholars in the fall of 2023, and so on from there. And, just as important, in addition to the money, we have mentors from our legal and government relations team assigned to each one of them. All in all, between those leading the program for us, reviewing applications, selecting the scholars, and mentoring them, nearly everyone on the team is involved. And I just couldn't be prouder of them.

Victoria Reese: This is all very intentional. It seems that Ally is focusing on an inclusive culture by, as your website states, doing culture right from the inside out. How are you driving an inclusive culture within your team and in the broader organization, particularly in a hybrid working environment? Are there any specific tactics to create inclusive cultures that are working? And anything specific to the legal function compared to the broader organization?

Scott Stengel: Across Ally, our focus has been on meeting everyone where they are, creating environments that encourage each individual to bring their whole person to work, whether it's in the office or on Zoom. Communicating transparently, creating room for candid feedback—these have been key. We've also been mindful of consciously talking about our desire to be together. In between COVID-19 waves, I travel to DC quite a lot. During a recent visit, I ended up sharing meals with friends on the left side of the political spectrum and other friends on the right. I asked all of them, “Do you want to live with one another? Do you want to be in community with one another, to share neighborhoods with one another?” We have differences all across Ally, but we have no differences in wanting to be together and passionately take care of our customers.

In legal and government relations specifically, I think we've also been served well by our attention to self-awareness and gratitude. Both of them are so important. Lawyers, more than anyone, bristle at even constructive criticism. But if all that I’ve done is praise you, what I've communicated is that your weaknesses are so debilitating that we need to shove them in a drawer and never speak of them. There's no human dignity, I think, in that kind of approach. I am my strengths and my weaknesses, my successes and my failings, my proud moments and my less than proud ones. This is my whole person. I think that when we form habits to talk authentically about the whole person, no reason should exist to question whether that's the person who we want with us, to be included with us. And even more that, this is the person we're grateful to have with us.

Victoria Reese: One final question, then. Looking ahead, which specific leadership skill sets and capabilities will be most important for your company to meet its strategic goals?

Scott Stengel: I suspect that our team (with a little jest) might expect me to say that communicating in plain English with some attention to grammar should be the priority. In truth, I'd emphasize judgment, particularly, I think, in holding ourselves with some kind of equal poise among competing interests. So, what does that look like? It looks like asking, “Did we slow down enough to think strategically, but still act with enough philosophy to disrupt the competition? Are we passionate about being owners? Are we enthusiastically pursuing our business objectives, still dispassionate in our professional skepticism, especially as lawyers, and disciplined and playing the long game? Do we innovate for the future, but still remain sufficiently stable to manage through the present? Do we strive for essentialism and keep our eye on what will move the needle yet continue to hear the voice of even a single customer? Do we press and hold each other accountable for driving outcomes, but still demonstrate empathy and pick each other up when we inevitably fall down?” How we exercise judgment across these dimensions, I think, will dictate how well we'll create value for Ally and everyone who depends on us.

Victoria Reese: Scott, it’s always a pleasure. Thank you for making the time to speak with us today. Lots of great lessons here.

Scott Stengel: Thank you Victoria, for taking time for me and doing everything that you do to make our profession so much better.

Thanks for listening to the Heidrick & Struggles Leadership Podcast. To make sure you don’t miss more future-shaping ideas and conversations, please subscribe to our channel on the podcast app. And if you’re listening via LinkedIn, Twitter, or YouTube, why not share this with your connections? Until next time.

About the interviewer

Victoria Reese (vreese@heidrick.com) is the global managing partner of the Corporate Officers practices, head of the General Counsel Practice, and the leader of the Legal, Risk, Compliance & Government Affairs Practice; she is based in Heidrick & Struggles’ New York office.