The annual survey from the Association of Corporate Counsel is one of the largest studies of CLOs in the market. Based on information from 861 CLOs across 20 industries and 38 countries, it provides important insights into the evolution of the CLO role, the value legal departments deliver to their organizations, and the political and regulatory forces with which they deal.
The annual survey from the Association of Corporate Counsel is one of the largest studies of CLOs in the market. Based on information from 861 CLOs across 20 industries and 38 countries, it provides important insights into the evolution of the CLO role, the value legal departments deliver to their organizations, and the political and regulatory forces with which they deal.
In the current survey, just released, CLOs discuss plans to increase capacity, including adding staff and investing more in legal operations. This is driven by a variety of forces, including the need for more resources to handle significant M&A and other transactions, needs associated with cybersecurity, compliance, and data privacy, and anticipation of more work related to navigation of ESG-related issues.
“For the past several years, we’ve observed the CLO’s role steadily continue to expand in the C-suite and have pronounced these times to be the Age of the CLO," says ACC president and CEO Veta Richardson. "But the disruption of the global pandemic and complexity of other challenges facing today’s businesses have accelerated unprecedented growth in the CLO’s range of responsibilities. CLOs are overseeing more corporate functions and to handle the additional workload, they are anticipating hiring increases across their departments. The unique skillsets and abilities that CLOs bring to the table make them invaluable business partners both strategically and for day-to-day operational issues – ensuring that this Age of the CLO will continue well into the foreseeable future.”
Other key insights of the survey include:
- The CLO as a key business partner is only intensifying, as a solid majority of CLOs always attend board meetings, meet with other business leaders to discuss operational issues, and are consulted by other executives on key business decisions.
- 55 percent of CLOs report planning to adopt new technology solutions in 2022, and of those, 70 percent identified contract management as their top technology priority.
- Cybersecurity, compliance, and data privacy remain the most critical areas for businesses. The high importance given to these three areas aligns with CLOs’ expectations that industry-specific regulations and data protection privacy rules will most likely pose the biggest legal challenges to the business. Sixty-six percent anticipate that industry regulations will cause the biggest legal challenges this year and 55 percent list data protection rules as a cause for legal concern.
- ESG continues to gain relevance and impact business strategy. Four in ten CLOs indicate that ESG issues are forcing companies to improve their compliance efforts to adapt to new environmental regulations and satisfy the growing number of investors and customers that are emphasizing ESG and corporate social responsibility.
- Half of CLOs report delivering value to customers as their organization’s top priority. Interestingly, 19 percent of CLOs say their organization’s top focus will be on investing in employees, a nine-point increase from the 10 percent seen in 2020.
Published February 25, 2022.
