A recent study conducted for the Association of Corporate Counsel (ACC) has shed light on the changing role of Chief Legal Officers (CLOs) in corporate governance. The study was conducted with 669 participants across 20 industries in 31 countries. The key findings provide valuable insights into the challenges and opportunities facing CLOs today.

1. Doing More with Less

The survey reveals that 42% of CLOs have received a cost-cutting mandate in the past year. Despite this, they are expected to manage an increasing workload, with 59% reporting an increase over the past year. This aligns with the study’s finding that companies with a CLO who also serves as Corporate Secretary tend to have fewer incidents of shareholder litigation and regulatory violations, suggesting that this dual role can lead to more efficient operations.

“This research provides a convincing argument that organizations where the CLO is also the Corporate Secretary are less likely to experience future legal troubles,” said ACC CEO Veta T. Richardson.

2. Regulatory Challenges

Regulations and enforcement are the top concerns for CLOs, with 53% citing them as the issues that keep them up at night. The study supports this concern, highlighting the importance of a well-informed legal department in ensuring compliance with laws and regulations.

The ACC Study noted, “Prior research indicates that lawyers in corporate boardrooms significantly reduce undue firm risk-taking and increase firm value because they possess litigation and regulatory expertise…one might expect CLO duality to be associated with fewer future legal issues, given the added legal expertise in the boardroom.”

3. Data Security

Data breaches are also a major concern for CLOs, with 34% identifying them as the biggest data-related threat they aim to mitigate in 2024. The study shows the importances of the role of the CLO in managing legal risks, including those related to data security.

4. Operational Efficiency

Operational efficiency is the top strategic initiative for 40% of CLOs in the coming year. The study suggests that combining the roles of CLO and Corporate Secretary can contribute to this goal by reducing the likelihood of future legal issues.

Joanna Totsky, Vice President and Corporate Secretary of The Toro Co., said in a statement, “for those of us who already serve in a dual role, the information in (the study) has long been evident.”

5. Work-Life Balance

Despite the increasing workload, 59% of CLOs report being happy with their work-life balance. However, this drops to 20% among those who experienced a significant increase in workload.

6. Overseeing Additional Business Functions

The majority of CLOs oversee at least three additional business functions beyond legal, including privacy, ethics, and risk. This reflects the expanding role of the CLO in corporate governance.

7. Positive Impact of AI

The majority of CLOs (67%) believe that artificial intelligence will have a positive impact on the in-house legal profession, particularly in document analysis and drafting.

8. Developing Business Acumen

CLOs are seeking to develop greater business acumen among their lawyers, highlighting the need for legal professionals to understand the broader business context in which they operate.

9. Leading ESG Strategy

Three out of four CLOs are involved in leading their organization’s ESG strategy, demonstrating the growing importance of environmental, social, and governance issues in corporate decision-making.

10. The Rise of the CLO Title

The title of Chief Legal Officer is becoming more common, with 28% of participants holding this title. The title of General Counsel remains more widespread, although there has been a drop in its usage, with 57% of respondents holding this title compared to 66% in 2022.

“Hopefully, the results of this study will encourage companies of all sizes to consider combining these two important roles as they make critical decisions about their future,” said a member of ACC’s Global Board of Directors.

The results of the recent ACC study, highlight the evolving role of CLOs in today’s corporate legal landscape. They underscore the potential benefits of combining the roles of CLO and Corporate Secretary, while also pointing to the challenges and opportunities facing CLOs in the years ahead.