More than half of governance professionals have experienced a near-miss compliance event in the past year, according to Diligent’s inaugural Global State of Legal Entity Compliance report, suggesting that legal entity compliance functions are operating with increasingly little margin for error as responsibilities expand faster than resources.
While Diligent’s headline statistic is striking, the report points to a bigger issue: governance teams are experiencing operational strain long before a compliance failure occurs.
Diligent surveyed over 300 senior practitioners, including company secretaries, general counsel and governance leaders across multiple regions. It found that 51 percent of respondents had experienced a near-miss compliance event during 2025, while a further 15 percent preferred not to disclose whether such incidents had occurred.
The findings suggest that compliance functions are being stretched by a combination of expanding mandates, limited headcount growth and outdated technology.Nearly three-quarters (74 percent) of respondents said their responsibilities had grown over the past two years. At the same time, 46 percent reported workloads growing faster than team capacity. Technology challenges have become just as significant as regulatory complexity, with 47 percent identifying technology gaps and legacy systems as their biggest obstacle compared with 46 percent citing regulatory complexity.
The report also indicates that many governance teams continue to rely on manual processes. More than half manage entity data through spreadsheets, Word documents and SharePoint rather than dedicated entity management platforms. As a result, 52 percent spend at least six hours each week tracking filings, deadlines and record updates.
Perhaps more concerning is the lack of visibility into compliance requirements. Only 19 percent of respondents reported having near real-time visibility into their legal entity obligations, suggesting most teams are dependent on delayed or fragmented information when monitoring governance risk.
The report argues that this visibility gap is a key driver of near misses. As organizations grow across jurisdictions and regulatory requirements become more complicated, governance professionals are increasingly expected to provide assurance without access to complete or current data.
Another notable finding is the disconnect between how governance professionals view their role and how they believe boards perceive it. More than half (56 percent) of respondents described themselves as strategic advisors to the board. However, only 17 percent believed their board viewed them in the same way. In addition, 52 percent said boards underestimate the complexity of entity governance, often treating it as an administrative function rather than a contributor to enterprise risk management and strategic decision-making.
The report suggests that this perception gap may make it harder for governance teams to secure the resources needed to address growing compliance demands.
Unsurprisingly, AI is emerging as another major theme. Nearly two-thirds (64 percent) of respondents identified AI governance as the most important skill for the next three years, ranking it ahead of more traditional legal and compliance capabilities. Meanwhile, 58 percent reported using AI in some form within their function.
But enthusiasm for the technology remains tempered by concerns around oversight and trust. Only 36 percent of respondents said they were comfortable allowing AI to complete actions without human approval, while data quality and confidence in AI outputs remain significant barriers to wider adoption.
For governance leaders, the report’s central message is that near misses should not be viewed as isolated incidents. Instead, they may represent evidence of structural weaknesses in operating models that have failed to keep pace with expanding responsibilities.
Natalie Bannerman
Natalie is a former telecoms and infrastructure journalist, a role she held for nearly seven years. Before this, she worked in the B2C startup space, covering lifestyle, arts and culture reporting. As senior reporter for Governance Intelligence she...
