Feedback from 1,639 chief legal officers (CLOs) in 55 countries reveals compelling evidence that sustainability, disruptive technologies, privacy laws, data security, and protecting a brand’s reputation are among the issues expanding the influence and prestige of the CLO in companies around the globe. Significantly, the proportion of CLOs who report directly to the chief executive officer (CEO) has jumped from 64 percent to 78 percent, according to the 2019 Association of Corporate Counsel (ACC) CLO Survey.
A leap of 14 points in one year in this critical CLO reporting metric demonstrates that “The age of the chief legal officer” is established, and on a strong foundation. The 2019 survey shows that CLOs are assuming positions of greater power and influence within their enterprises, and taking on roles beyond that of technical legal adviser. Nearly 70 percent of CLOs surveyed indicate that the executive team almost always seeks their input on business decisions. Last year, that level was 11 percentage points lower.
“From sustainability to data protection, the issues pressing on businesses are growing in urgency and complexity,” said Veta T. Richardson, president and CEO of ACC. “The CLO and his or her legal team are uniquely qualified to advise the CEO and the board of directors on how to chart a path forward, taking the law, ethics, culture, and risk tolerance into account. This year’s survey leaves no doubt that we are experiencing the age of the CLO, and that companies are awakening to the significant role their CLO can and should play.”
The report also asks CLOs which issues give them most concern. Just over two-thirds of CLOs surveyed said that data breaches will be extremely or very important in 2019, followed by regulatory or governmental changes, information privacy, and technology developments. Meanwhile, the top issues affecting their companies’ business decisions in the year ahead are new regulations, brand reputation issues, disruptive technology, and mergers and acquisitions.
Other significant findings in the 2019 ACC CLO Survey include:
- CEOs are most likely to ask the CLO about growth, while boards are more focused on asking the CLO questions about risk or compliance.
- Forty-five percent of CLOs expect their budgets to increase in 2019. This is down slightly from 56 percent in the 2018 survey.
- As CLOs solidify their place in the C-suite, they increasingly oversee corporate functions other than legal. Compliance is the most common corporate function reporting to the CLO, but beyond this legal-adjacent function, one in four CLOs oversee government affairs, and one in five oversee human resources.
- Two in three CLOs regularly attend board meetings (68 percent). CLOs who report to the CEO are more likely to state that they almost always attend board meetings (75 percent vs. 46 percent).
- Forty-seven percent of respondents reporting that they anticipate M&A activity in 2019. ACC will publish a special report highlighting additional findings and trends in February 2019.
For more information on the 2019 ACC CLO Survey, please visit www.acc.com/closurvey.