Few things create more silent chaos in the boardroom than unclear ownership of corporate governance. Good governance drives success — but when accountability is blurred, it quickly turns into one of the most overlooked risks a company can face. Many boards aren’t sure whether the CLO or the corporate secretary should claim that responsibility.
If this has been an ongoing debate in your organization, rest assured that you’re not alone. This article will help you understand how boards, family offices, and executives can gain clarity in navigating governance structures to build greater accountability and stronger compliance structures.
Why Governance Ownership Is Often Unclear
While the CLO and CS roles are distinct, they often have overlapping responsibilities.
Both are responsible for advising the board of directors and the management team on critical legal issues, including regulatory compliance and sound governance and business practices. As such, ownership is often ambiguous when governance and legal issues are one in the same.
In some companies, the CLO and CS roles are combined, but doing so can introduce significant risks. The CLO is accountable to the CEO, while the CS reports to the board.
When these responsibilities converge, conflicts of interest are almost inevitable. Dual-role leaders may feel pressured to cast management’s actions in a favorable light, limiting the board’s access to the unbiased information it needs for proper oversight.
To prevent confusion, governance gaps, and unnecessary legal or reputational exposure, organizations must proactively define roles and establish clear governance frameworks, whether the positions are combined or kept separate.
The Corporate Secretary’s Role in Board Processes and Compliance
The board secretary is mainly responsible for ensuring effective and efficient board processes while upholding corporate compliance. Here’s how they typically do it:
Meeting Management
The CS is responsible for organizing and facilitating board and committee meetings by setting calendars and agendas and seeing that directors receive timely and accurate information to prepare. The CS also records official minutes to document decisions and ensure the fulfillment of fiduciary duties.
Board Support and Coordination
The CS onboards new directors, provides resources, and advises on governance and board-evaluation practices. The person in this role also acts as a liaison, facilitating communication between the board, the management team, and the company’s shareholders.
The CS supports the development and implementation of policies that promote ethical conduct and accountability throughout the organization.
Regulatory Expertise
A CS must have deep legal knowledge to advise on corporate matters and ensure compliance with regulatory filings and statutes. Depending on the defined scope of their role, they may also help the board identify and manage risks.
The CLO’s Role in Strategic Oversight and Enterprise Risk
More than just a legal advisor, the chief legal officer plays a key role as a strategic partner in corporate leadership. The following critical responsibilities are what maximize their strengths:
Strategic Business Partner
The CLO is responsible for offering legal insight that informs decision-making.
They may consult in areas like mergers, product development, and market expansion, helping the company navigate complex legal issues while meeting growth targets to achieve broader organizational goals.
Major Transactions
CLOs are the ones at the forefront of the M&A due diligence process. They help guarantee compliance with relevant rules and laws and negotiate contract terms to ensure that they’re enforceable and beneficial to the company’s interests.
Risk Management
The CLO uses their 360-degree view of the business to shape the company’s enterprise risk management framework and manage all forms of risk, including compliance failures and litigation.
How to Delineate Responsibilities to Prevent Blind Spots
Because CLO and CS duties can overlap, it’s become even more critical to outline the specific contributions of each role. The board can do that effectively by following these best practices:
Define Each Role’s Scope
The primary difference between the CLO and the CS lies in their operational functions and reporting lines.
Reporting to the CEO, the CLO serves as chief in-house counsel and manages legal risks and liabilities for the organization.
By contrast, the CS reports to the board and provides support before, during, and after meetings. Though they’re concerned with regulations and governance requirements, the scope of the role is a bit narrower.
It’s vital to have well-defined job descriptions and charters for each role so everyone understands who is responsible for which decisions.
Outline Communication Structures
There should be clear communication channels in place when each role interacts with the board and management team. The timely receipt of accurate and well-organized information is essential for enabling both the CLO and the CS to perform their governance and oversight duties.
Clear communication also reduces information redundancy and overload and promotes transparency and trust.
Though the CLO reports to the board, it’s still critical to ensure that they have a direct line of communication with the board that doesn’t run through the CS or the CEO. This will allow for the exchange of independent and unbiased advice.
A Framework for Boards to Evaluate Their Governance Architecture
To consistently achieve business goals within the boundaries of regulatory compliance, it’s imperative for boards to regularly evaluate their governance architecture. To do so effectively, they must:
- Consider the reporting structure and relationships to confirm that they provide the right balance of strategic influence and independent advisement
- Assess whether the current setup gives the CLO and the CS the access they need to properly (and independently) fulfill their duties
- Determine whether there’s a clear delineation of the CS and CLO roles to avoid ambiguities and maximize value
- Regularly analyze the performance-review process for both roles to ensure that it’s closely tied to governance goals
- Weigh the potential benefits and risks associated with combining roles and consider ways to mitigate any identified legal issues
Adhering to these best practices will help company leaders choose the right course when structuring the roles and responsibilities of the CS and the CLO, thereby preventing confusion and conflicts of interest.
Getting Governance Ownership Right Brings Long-Term Organizational Success
Solid governance builds trust, promotes accountability, and ultimately leads to better business decision-making. Because of the role overlap between the CLO and the CS, it can be difficult to understand who owns what.
While the CLO is a strategic business partner, the CS offers board support and regulatory guidance. Regardless of your company’s governance architecture, clearly demarcating these roles and emphasizing well-defined communication structures will enable each executive to govern effectively.
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