Why Arbitration Belongs in the Boardroom

In an industry defined by complexity, collaboration, and constant change, construction leaders have learned a crucial lesson: dispute resolution isn’t just a legal mechanism; it’s a business strategy.

For general counsel across sectors, that insight has never been more relevant. Whether managing a commercial partnership, a global supply chain, or a high-stakes acquisition, the same principles that keep billion-dollar construction projects on track can help corporate legal departments prevent disruption and preserve relationships.

From risk response to risk strategy

Construction projects are built on uncertainty — shifting site conditions, material shortages, and regulatory changes. Disputes are inevitable. What distinguishes successful construction companies is not avoiding conflict but planning for it.

That mindset has made the construction industry an early adopter of arbitration and other forms of alternative dispute resolution (ADR). “Because we are a not-for-profit institution, our primary mission is to educate chief financial officers, legal teams, and really the entire executive suite on the benefits of arbitration,” said Frank Rossi, executive vice president, chief operating officer, and chief risk officer of the AAA-ICDR.

Rossi notes that when organizations address dispute resolution during contract formation — rather than after conflict arises — they can align processes with business goals, budgets, and timelines. “We spend a lot of time helping people understand the value of a good arbitration clause and making sure they’re selecting the right process for their dispute,” he said.

Why arbitration belongs in the boardroom

The advantages of arbitration are well-established — flexibility, privacy, industry expertise, and speed. But what’s changing is who’s paying attention.

Executives are increasingly viewing arbitration as a component of enterprise risk management, not merely a substitute for litigation. “I’ve never seen a construction project without some sort of conflict,” said Karen Layng, CEO of M.A.I.T. Co. and chair of the AAA-ICDR Board of Directors. “To be able to parse through it, however, and have an ADR clause that can indeed appropriately get through an efficient, cost-effective, fair, and expedient resolution of the parties’ disputes is really, I think, what all parties are after.”

That same logic extends far beyond construction. In-house counsel in sectors such as technology, healthcare, and finance can apply a similar proactive approach — integrating arbitration into their contract strategy to ensure that, if disputes arise, the framework for resolution is already in place.

The competitive advantage of preparedness

As legal departments face mounting pressure to manage costs, accelerate timelines, and safeguard reputation, arbitration offers a framework that supports governance and agility. Institutions such as the AAA-ICDR have developed dedicated rules, technology-enabled case management, and specialized panels tailored to industry needs. Tools like ClauseBuilder® AI (Beta) enable in-house counsel to create clear, enforceable ADR clauses tailored to the relevant industry as well as the complexity and risk profile of their agreements, thereby reducing ambiguity and the likelihood of procedural disputes later on.

These innovations reflect a larger shift: the convergence of legal strategy and business strategy. Forward-thinking organizations are moving dispute resolution from the margins of legal operations — often, an afterthought — to the center of enterprise planning, much as risk and compliance frameworks have matured over the past decade.

The takeaway for GCs

For general counsel, the lesson from construction is clear: arbitration isn’t merely an alternative to litigation — it’s an opportunity to design an enforceable dispute-resolution process that serves the business.

By incorporating arbitration clauses early, leveraging institutional expertise, and embracing technology-driven tools, GCs can transform potential flashpoints into predictable, manageable outcomes.

As Layng put it, “The ADR revolution — whether in construction law cases or the broader world — is critical. And the way to get that done, and most efficiently, fairly, and effectively, is through the AAA-ICDR.”

When done right, arbitration doesn’t just resolve disputes. It protects business continuity, preserves relationships, and reinforces the GC’s role as a strategic leader, turning conflict from a liability into a competitive advantage.