Business Partnership between CLO and CFO Boosts Company Expansion, as Detailed in Report by ACC and Odgers
A new report, titled "The Power Partnership: Optimizing CLO-CFO Collaboration for Business Success," has been released by the Association of Corporate Counsel (ACC) and global executive search firm Odgers. The report underscores the critical importance of effective collaboration between Chief Legal Officers (CLOs) and Chief Financial Officers (CFOs) in today's complex and fast-moving global economy.
Veta T. Richardson, ACC's president and chief executive officer, stated that this partnership is essential for driving sustainable business growth. The report is based on global survey data from hundreds of CLOs and in-depth interviews with leading CFOs. It is available for download on ACC's website.
The report emphasizes the importance of executive collaboration, particularly between CLOs and CFOs, for navigating today's complex business environment. It outlines best practices and practical recommendations for fostering CLO-CFO synergy at the executive and board levels and building resilient operations.
Key findings from the report include:
- Early and Regular Communication: CLOs and CFOs must engage early in strategy development and maintain regular, transparent communication to ensure alignment on financial and legal risks and opportunities.
- Shared Risk Management: Collaborative risk assessments help both officers anticipate and mitigate financial and legal risks, improving the organization’s overall resilience.
- Aligned Strategic Priorities: When CLOs and CFOs jointly prioritize initiatives, they better align resources and timing to maximize business impact.
- Building Trust and Mutual Understanding: Developing a deeper mutual understanding of each other’s roles, pressures, and metrics supports stronger partnership and faster resolution of conflicts or uncertainties.
- Leveraging Legal Insights for Financial Decision-Making: The CLO’s legal perspective contributes to more informed financial strategies, including compliance, regulatory forecasting, and contract negotiations that affect cash flow and capital allocation.
Best practices recommended include:
- Establishing Formal Collaboration Processes: Regular cross-functional meetings, joint committees, or task forces focused on key strategic projects or risk areas.
- Creating Joint Governance Frameworks: Shared objectives, clear roles, and accountability mechanisms for initiatives affecting both finance and legal.
- Integrated Data and Reporting: Using combined legal and financial data analytics to identify patterns, forecast risks, and spot opportunities for process improvement.
- Cross-training and Education: Encouraging CLOs to understand financial drivers and CFOs to grasp legal frameworks enhances decision-making quality.
- Leveraging Technology Tools Together: Jointly using digital platforms to track and manage compliance, contracts, budgets, and forecasts.
Through these findings and best practices, the report demonstrates that a strong CLO-CFO partnership not only mitigates risks effectively but also unlocks strategic initiatives that fuel long-term business growth.
The report also highlights the evolving role of the CLO to include revenue enablement through operational efficiency, proactive counsel on corporate governance, geopolitical risk, and opportunity spotting. Forward-thinking CFOs increasingly seek legal leaders who possess a deep understanding of the company's financial architecture to foster strategic partnership between legal and finance.
CFOs stress the importance of consistent, scheduled meetings to discuss key initiatives for effective information sharing and strategic alignment. CLOs educate financial counterparts on the "cost of non-compliance" to build trust and strengthen collaboration between legal and finance teams.
According to the report, the impact of CLO-CFO collaboration is especially strong in larger companies and when the CLO has a direct line to the CEO. Conrad Woody, Odgers managing partner, emphasizes the importance of integrated financial strategy and legal foresight for organizational resilience and growth.
The report also underscores the importance of visibility, alignment, and trust across the executive team for the success of the CLO-CFO alliance. It provides insights into how high-performing organizations are breaking down traditional functional silos to create integrated, forward-looking executive partnerships. Collaboration is critical for bolstering organizational integrity and stability, according to 85% of CLO respondents.
ACC is the premier global legal association promoting the common professional and business interests of in-house counsel, offering information, education, networking, and advocacy.
- In light of the report titled "The Power Partnership: Optimizing CLO-CFO Collaboration for Business Success," it is essential for CFOs to work closely with their counterparts, CLOs, in investing in strategic initiatives to drive sustainable business growth.
- The effective collaboration between CLOs and CFOs in managing risks and aligning strategic priorities can unlock opportunities that contribute to a company's resilience and long-term business success, as emphasized in the report "The Power Partnership: Optimizing CLO-CFO Collaboration for Business Success."
