As the role of legal departments expands in Europe and the United States, the case of Nippon Steel highlights how an active and strategic legal function can support corporate management. The company's approach to responding to changes in the role of shareholder meetings is also drawing attention.
In the steel industry, appointing chief legal officers (CLOs) and general counsel (GCs) is becoming standard practice in Europe and the United States. Legal departments are also gaining prominence at Japanese companies and are being positioned alongside finance departments as a pillar of management support. Using Nippon Steel as a case study, this article examines why the role of legal departments is growing and what functions they perform in day-to-day corporate decision-making.
In a subsequent development, the legal department is said to have supported Nippon Steel's senior management together with the finance department in the acquisition of U.S. Steel, strengthening the view that active and strategic legal support is essential. The need to respond to changes in the role of shareholder meetings has also been highlighted, broadening the responsibilities and scope of legal departments.
Going forward, the legal department is expected to play an increasingly important role in supporting management decision-making through advance risk assessments and strategic advice as part of the corporate decision-making process. Nippon Steel's example is positioned as one indication of the direction in which Japanese companies are strengthening their legal departments.