Global Expansion, Compliance, and AI: The General Counsel Barometer 2026 Revealed

Annie: Hello, everyone, and welcome to today's webinar, "Global Expansion, Compliance, and AI, The General Counsel Barometer 2026 Revealed." My name is Annie Triboletti. I will be your moderator kicking things off today.

So I would like to introduce our experts today. We have Rogier Bronk, Jonathan Scrocchi, and R.J. Bertina. So with that, I would like to turn it over to Rogier, Jonathan, and R.J.

Rogier: Thank you, Annie, and welcome, everyone. We're really excited to discuss not only the findings of our Barometer Report, but also go into a little bit more detail on AI and the compliance landscape. So that being said, let's look at the agenda for today.

Well, for the ones that are new to the webinars from CSC, we'll just highlight briefly who CSC is, etc. The key expansion trends that were noted in the Barometer Report, entity governance insights, outsourcing spend, especially now with the combination of AI being used for legal teams. And, of course, as Annie already mentioned, besides a poll question, we have also the availability to answer any questions at the end of this session.

About us, CSC, privately held for over 125 years. CSC has been in the forefront of corporate services, helping business navigate the complexity with confidence and precision. Our global reach is unmatched. Over 140 jurisdictions, including, of course, the U.S., completely coordinated and aligned behind the scenes.

CSC basically empowers our clients to operate seamlessly across multiple jurisdictions while staying compliant and competitive. Once you work with CSC, we ensure that your entities remain compliant. That being said, we're extremely proud that 90% of the Fortune 500s, the Best 100 Global Brands, but also 70% of the private equity firms are calling us home and using corporate services, whether it's in the U.S. or internationally.

So at CSC, it's not always about the services. It's the people behind the services. We truly believe in a very holistic approach that is, of course, supported by our award-winning technology and entity management platform. But experience paired with innovation and award-winning technology simplifying the complex processes, ensuring our clients can focus on what they do best, leading their industries and shaping the future.

The General Counsel Barometer, this is the fourth one in a row, and we're going to discuss some key findings in this report. The Barometer Report is the result of hundreds of surveyed legal professionals worldwide. So not only here in the U.S., but also EMEA and APAC regions have been surveyed. Today, like I said, we'll find some key findings of the report. We'll talk about the compliance gap, international expansion, regulatory strains, and of course the AI dilemma, the big elephant in the room, with our subject matter experts, R.J. and Jonathan.

I do want to say and encourage everyone to download the report. It's a very interesting report to find, and you'll see trends throughout the previous reports that we will discuss here as well.

Now this is a very interesting one, region based. There is obviously a good spread of responders throughout the globe. They were almost evenly spread out, which provides a very good snapshot of our global expansion, the concerns about the compliance risk, AI implementation, the cost thereof. The reasons might be far and in between, but what we see currently is that M&A partnerships and AI enhancements really drive the expansion. There are some limitations to expanding into as well as expanding into the jurisdictions that they already had expanded in the previous years.

But Jonathan or R.J., like the top three objectives for 2026 in terms of managing global legal operations, upgrading levels. Which of the three would you like to tackle first for our audience?

R.J.: Jon, you go ahead.

Jonathan: Yes. Hi, Rogier. It's a pleasure to be here today. So out of the three, I would like to start with the consolidation of legal service providers. It is seen not only by this report or survey, but also from what our clients have been approaching us for, the pursuit of consolidating the corporate secretarial services with corporate service providers, like CSC. The main reason driving these actions and needs are the challenges that these organizations face internally.

Normally corporate legal teams, as the organizations grow and expand across the globe and build out their global portfolios of entities, they become a little bit stranded in their internal resources. Not only do they become stranded, but the political landscape, the in-country regulations do change. Corporate secretarial service or corporate secretarial fulfillment is and has a life of its own in a way. So keeping up with all the changes in local legislation, being able to be up to date, having the in-country knowledge of what needs to be complied with to fulfill it in a timely manner accurately is one of the main challenges that constrained teams have, especially if they're multinationals. Yeah.

Rogier: And I'm actually very glad that you took this topic, simply because if you see throughout the globe, the majority of like going into jurisdictions is still here in the Americas, compared to EMEA kind of like trails behind. Do you have any ideas why mostly here in the U.S. or the Americas in general people like to expand into maybe the LATAM region, that you're more familiar with?

Jonathan: Well, yeah, so, I mean, the U.S. is one of the leading, if not the leading economy across the globe. So it drives changes across the political landscape, the economic landscape. And we know from experience that U.S. corporations grow both organically and inorganically. The inorganic growth comes from a lot of M&A transactions.

In LATAM, which is the Americas' backyard, so to say, it's still an evolving region, right? You have a lot of third-world countries, countries that are getting to the second-world stage economies. You have the geopolitical landscape changing. We've seen that in El Salvador. We've seen that the relations between U.S. and Mexico continue to be fine-tuned with the new administration. We see, for example, in Argentina, with Javier Milei's economic policies that are opening up the country.

So the political changes and shifts within Latin America have a direct impact on the local economies, which in turn have a consequence, is that U.S. companies start to look again into Latin America as a region where they can potentially invest, acquire businesses. In the case of Venezuela, which is the wild card in the region, you see all this transition now of U.S. energy companies wanting to go into Venezuela, not only for the oil but also for the gas. You have the development or the [inaudible 00:09:06] of data centers that go hand in hand with the energy industry.

So again, the U.S. role within the geopolitics of the region and how each country is changing its political landscape has a direct impact on the local economies, which drive then the opportunities for U.S.-headquartered companies and European companies to expand their footprint, expand their businesses. And to do so, they need to go through the structuring of their corporate secretarial entity portfolios.

Rogier: Yeah, it seems to have a larger effect in LATAM, because if you look through our Barometer Reports from 2025 and 2024, you really saw an uptick of entering for the first time into LATAM. And now you see, well, a decrease in first-time entering versus an uptick in expanding into that jurisdiction.

You mentioned Venezuela. There are presidential elections in Colombia. So, yeah, it's a very interesting fact that if you look at everything combined, how that that trend is establishing itself.

R.J., Europe is a completely different animal, so to speak. But can you highlight some of it? Because we noticed here in the Americas that it is mostly now aimed at mergers and acquisitions, finding new partnerships, expanding in the current home jurisdiction in LATAM. How does that work in EMEA? Because there is also a significant uptick in M&A activity over there, but that had [inaudible 00:10:46].

R.J.: Yeah. So thanks, Rogier and Jonathan, for these comments. I think for the EMEA region, it isn't that much of a different story. If we look at these key findings for a moment and the three points you highlighted to comment on, for me, the key element to look at is improving data transparency. The visibility on data for GCs, for, in fact, all stakeholders within organizations is of utmost importance.

What in general as a key finding to me is a very positive, standout element is that that growth remains a very important priority, despite the geopolitical landscape that we currently find ourselves in and with that some of the regulatory uncertainty that is also there. If you look at the M&A numbers you referred to for the EMEA region, compared to last year, numbers are up significantly. I mean, there's plenty of sources that will confirm that. I think it's on or near 80% year-to-date in terms of the deal value.

And with that also comes a very super, super important and interesting element, and that has to do with what happens following an M&A transaction, right?

Rogier: Exactly.

R.J.: The whole integration that can take I don't know a lot of gray hairs and a lot of time in any case if you want to do a proper job. And it requires, especially from a company secretarial and from a legal perspective, a lot of aligning and a lot of mapping and a lot of decision-making also. And with that, I come back to the data.

Rogier: Yeah, exactly.

R.J.: It needs to be as accurate and as transparent as you can have it to ensure that you take proper decisions.

Rogier: Yeah. Now you're mentioning data. Obviously, who owns the data is in the driver's seat, right? So the digital transformation train has been going on for almost 15 plus years, if not longer, if you know the specifics around it. But upgrading levels of technology and automation, everybody these days thinks about AI. Of course, AI is embedded in our Entity Management software as well. But we still see an uptick of requests for our Entity Management software. So companies large and small are still going further with the digital transformation, trying to get that data as clear as possible in front of internal stakeholders. So that, too, consolidating legal service providers is possible because without the data, and we know this in our day-to-day work, when we ask our clients, it's like what's your current spend for these type of services, there's often silence. So data mining, whether it's with the assistance of artificial intelligence, is crucial for companies to grow and having that M&A transition go smoothly.

Do you think there is a difference between EMEA, APAC, and LATAM, for example?

R.J.: There are a lot of local nuances, right? But from a global perspective, I would say there shouldn't really be a difference. At the end, you want to have data. You want to base decisions on accurate data. And with that, yeah, I don't feel there should be a difference. I mean, on a practical level, of course, there are many differences. But overall, from a consistency perspective, and that's maybe the word that we need to emphasize and repeat a couple of times, without sounding like a broken record, but the consolidation of legal service providers is a good example. If we in a proper way help organize that, you end up with as much as possible a consistent flow of data, and that will help tremendously with accuracy.

Rogier: Yeah. And I think, looking at these particular slides, and I will toggle to the next one, we kind of covered this already a little bit by going over the reasons why. Fifty-one percent said that their company expanded their North American presence in 2025, higher than last year's figure of 46%. There is still the urge to move into North America, Canada, and the U.S. simply to be closer to consumers. That's where capital is mostly raised for expansion.

Now since you're based in Europe, R.J., what type of clients do you predominantly see that is asking for entering into the U.S. market or Canadian market, or let me say the whole region of the Americas? Is it a specific type of client?

R.J.: I wouldn't feel comfortable to just highlight one particular type of client. I mean, overall, we see that regional players here very often, because of all the technology that is at our disposal, seek opportunities to expand globally. I mean, from that angle, well, the three of us experience this almost on a daily basis. We know that clients really appreciate the handholding that we can offer from an entity life cycle sort of perspective.

But also, when it's M&A activities, there are different ways to enter into a market. And I think Jonathan will or has already mentioned it a little bit, but the sometimes local restrictions that apply in some jurisdictions, for instance in LATAM, where you need let's call it certain feet on the ground in order to obtain licenses in order to conduct business, even when you start up, that's one thing where sometimes partnerships might be more appropriate. At the same time, we know from a day-to-day practice, M&A activities very often also form a very nice method of entering into new markets. And even though that causes, within our space, the company secretarial and the company maintenance department, so to say, that can cause a whole range of work to be handled.

Rogier: Yeah.

R.J.: It's very often proving a very effective way to enter into markets, right? So yeah, for me, the EMEA region, as it is, is super important to global companies, and we know this from the daily practice. Again, I keep saying it, but it's really true. Europe remains a gateway for broader international operations.

Rogier: Yeah.

R.J.: In fact, in the UK market right now, but continental Europe is a critical hub for multinational organizations in part, also, because very often there are huge consumer markets there or interest.

Rogier: Yeah, exactly. Yeah, if you look at EMEA, from the questions that we receive here in the Americas, to expand into EMEA indeed has quite a bit slowed down. But I agree with you, R.J., there is no universal answer or single official announcement that we can make on this webinar what the reason is that there is a reduced percentage of entering into EMEA, right?

If you're looking at, for example, business entry or investment or even travel or just in general economic activity in EMEA, there are a few things that you can highlight, slow and moderate economic growth. EMEA is a very developed market. And it's projected that, in 2026, it has just a reduced, moderate and economic growth in the majority of the European markets. There's uncertainty, similar to LATAM, geopolitical. Look at the war in the Middle East. There are some effects, rippling effects throughout the rest of Europe.

We'll get to this other point, which is trade and regulatory frictions. The compliance landscape in Europe is still, as we know, very challenging. It's not always clear. We went over the UBO requirements. It's still a moving target in most of the European jurisdictions. And, of course, the cost of doing business, the market dynamics in general, logistics, compliance, this really can slow down the investment of having companies going into EMEA.

I don't want to talk about much of border controls because I think we're just going too far into the reasons why. But like you said, there's no universal answer to this. But it's interesting that it's quite in line with the Americas, but a lesser percentage.

So looking at this, it becomes a little bit more clear. If you see, for example, North America, expand existing presence is down with 5%. And with existing presence means they already have an entity here in the Americas. First-time entry also down with 23%. So the reduced presence is 90%. You see the same trends, even though first-time entry is somewhat up in Europe, but that's overall in Europe. So you go back and forth between the numbers, and you see that there is a decrease on the one side, and there's only one uptick in Europe on the other hand. UK, I cannot talk much about the UK specifically.

But LATAM, you see expanding existing presence, this is what Jonathan mentioned. Companies that have gone in LATAM, whether it's Colombia or Argentina or even Brazil, we saw an uptick in 2024. But now, everybody is focused on strategic partnerships in those jurisdictions to kind of like firm up their presence, safeguard capital to make sure that they now can sustain political downturns in certain jurisdictions, but also move back up and acquire other companies in those jurisdictions besides finding those partnerships. Is that also something that you see in your conversations with LATAM in multinationals, Jonathan?

Jonathan: Yes. In a way yes, and one thing that needs to be considered and is a fact is that the U.S. political strategy, not only on their own region but across the globe, specifically with China and Russia has a direct impact in South America because South America even though it's a big territory, China and Russia managed to build very good ties in the past, I would say, two decades, given that across, yeah, the whole continent, most of the countries tended to be left side of politics, which aligned a lot with the politics from China and Russia. And now, with all these actions that the U.S. has taken, it has changed the strategy of China and Russia with respect to Latin America.

And that shift and change indirectly has an increase in compliance risk, market risk, which companies especially headquartered in the U.S., who are or were considering to go into LATAM, are holding back and waiting to see how this plays out. That's why we see that the first-time entry is going down in percentage. And in a way, companies that had already an existing presence in the region are potentially doubling down because they foresee that when things get resolved in the near midterm, based on again the geopolitical or highly geopolitical landscape plays out, they expect that movement to come in.

So you can see it as existing companies with exposure in Latin America to be reinforcing that ahead of time, expecting for the economies across the different countries and markets to be ramped up as they align with U.S. economic and political strategy on this side or this hemisphere.

Rogier: Yeah. And here at CSC, we can obviously assist with whatever comes out of your M&A transaction in LATAM, but also the rest of the world. I sat in a panel discussion many, many years ago, and something what struck me was I think it was at the time that we had the World Cup in Brazil, so it's quite some time ago, and the other panelists mentioned like, well, if you go into a certain jurisdiction, please, of course, obtain advice and a good partner for your services that are needed there. However, many companies don't really have an exit strategy after going into a certain jurisdiction, which can actually be more costly than entering a new market, surviving the downturn or upswing, scaling up or finding partnerships or M&A activity.

Normally, what we say to our clients, when they speak to us and going into a first jurisdiction for the first time or expanding through M&A: What is your exit strategy? What is your outlook for the upcoming two or three years surviving political regimes, economic downturns, etc.? You get those questions quite often too, right, Jonathan?

Jonathan: Yeah, and that's a good point. I mean, if you think about it, forming an entity, I wouldn't say it's necessarily simple in Latin America. But wherever you do establish an entity, once you do, it becomes a sunk cost, right? So when you think about the exit strategy and having to dissolve an entity, the process might be even longer. There's a significant cost related to it.

So put in simple terms, it's better to keep what you have and hold it, maintain it, and see how it plays out opposed to, yeah, figuring out an exit strategy because the cost you already took upfront, right, and you can potentially leverage the existence of those entities in the future. And those entities can very well be dormant opposed to dissolving them.

So those are the conversations that I'm mainly holding as clients come back to us and are discussing their exit or the replenification of their strategy from a corporate secretarial standpoint.

Rogier: Yeah. And it's correct what you said about sometimes it's even more economical to keep the entity just in the country and do your annual obligations. We get questions from clients like, "Well, I've entered into this jurisdiction. We have no real presence there anymore. It's a dormant entity." And then they're still surprised that they still need to adhere to local regulations and perform the annual compliance duties. So there is a cost to it. But dissolving can take sometimes months, years, a very lengthy process, especially if you look at Brazil. But also Argentina and Chile are top when it comes to exiting the jurisdiction.

Let's look at the next slide because I think it's the elephant in the room, which is entity governance and risk. And I've mentioned this I think now on every single webinar that, in the beginning, we saw in our Barometer Report that proportionately a lot of the general counsels that we interviewed and surveyed were actually very confident that their compliance status of the entity portfolios were all in good standing. It's a very high percentage. Today, we're looking at 28 fully compliant in 2025. It started, I think, somewhere in 70% up in 2024. That's now down to 7%.

Is that realization, R.J., of general counsel? Or is that in combination what you see in the second column, UBO, managing multiple [inaudible 00:28:35] . . .

R.J.: Yeah.

Rogier: . . . start to realize that something is not right, right?

R.J.: Now, yeah. I don't want to look at it in such a dramatic or negative way. But for sure, I'm not surprised by reading these results.

Rogier: Me neither.

R. J.: The 7%, maybe you're more realistic approach, right? When you talk about realization, I mean, in very often scenarios, we're talking about multinational groups that have entities across I don't know how many dozens of jurisdictions, and then add to that the increasing number of regulatory requirements, statutory requirements, and then the changes there too. It is not always an easy task to ensure that everything is kept in good order and in compliance with ever-changing and newly introduced rules and regulations, right?

Rogier: Yeah.

R.J.: And that is assuming that everybody within your organization properly alerts you and lets you know what is what, and incoming messages and incoming requests are all properly followed up and adhered to and processed. So that requires a certain setup that we often try to help.

Rogier: Yeah. I think it's like similar to the other question that I asked you previously. It's not a universal answer, right? But it's a combination of GCs, in-house legal teams waking up like, "Hey, we have an M&A transaction." We're doing a corporate health check on it, and we realize that a lot of these entities are not compliant anymore because we look back not even that far, five, six, seven years. When you work with best-in-class local law firms, you kind of expect that they are on top of the regulatory landscape and the changes thereof. However, at the end of the day, they're just sending you a newsletter, and the result is that the clients of those top-notch law firms that are really doing a good job for the heavy duty legal work, the risk of finding out if your entity remains compliant in that jurisdiction falls back on the client.

R.J.: Yeah.

Rogier: So with the M&A activities, with the compliance landscape only becoming more complex, in-house legal teams, general counsels now start to realize like, wait a second, this was indeed a false positive. We're not compliant at all. We need a partner like CSC to make sure that we truly mitigate our risk because we need to focus, as mentioned earlier, on driving the industry forward and your business being more profitable.

R.J.: Right.

Rogier: So yeah, R.J.

R.J: No, I agree with you. I mean, it's to do with the volume of the regulatory changes that by themselves have become a risk almost. And let's call out one thing. It's not just the regulatory sort of increase related to company secretarial matters, right?

Rogier: Yeah.

R.J.: There are traditional and sometimes related areas that require careful attention. I mean, we're going to try and speak a little bit towards artificial intelligence in a moment. In Europe, in Britain in particular, there is this, and I'm from Europe myself, so I can easily sort of say like they, in a bit of a negative way, I mean, we have an EU legislative framework, and still we managed to create at least 27 different versions of the same piece of legislation. And I'm referring to the UBO requirements.

Rogier: Yeah.

R.J.: It keeps on evolving. And slowly but surely, there will be sort of a red line and a pattern, but it's not always easy to keep track. And think now of the introduced back in 2024, by the way, the EU Artificial Intelligence Act. It's there. People have heard of it. There are news articles about it. But slowly but surely, and when I say slowly but surely, in the year 2026, there will be certain elements that will kick in that will play a role in the next decisions.

Rogier: Yeah, most definitely. Yeah, and that's why actually this slide is a snapshot of a Barometer Report. But if you really look at it from left to right, 7% are fully compliant. That's what we received back from our surveyed panel. And then you look at the reasons, what poses the greatest risk, UBO, managing multiple service providers, and artificial intelligence. Let's take the top three. And then you look at the last column, still 56%, so more than half is confident in managing their entities globally.

This only shows that the majority of the respondents of the Barometer Report are finally aware of what's going on with their entity portfolio, have the right tools and people in place. Even though the entire, let's say, the last 10 years everything was focused on digital transformation, reducing the workforce in-house legal teams, having that false sense of security that everything will be fine because we're working with best-in-class local law firms, that has completely shifted towards like we know what's going on. We know what the main risks are in what keeps us non-compliant, but we're managing things a lot better. And that comes back to what you said earlier, that depends all on data. So speaking about data, let's tackle the elephant in the room, right? No, not yet. The AI is coming later.

But yeah, R.J. or Jonathan, startup, Fortune 500, it depends on the size of the organization, is there any correlation and reasoning behind it? I don't want to say like, okay, there's no universal answer. You can truly see something if you compare them both.

R.J.: Yeah. So for me, I'm happy to comment a little bit. But for me, so the table on the left, right here, shows by itself a little bit of, to me, an unclear picture because of the missing context. I think it's important here to mention that, on average, we have a certain pool of clients that we've interviewed, and they have a certain amount of legal entities, and that then determines how much time they're spending because we try to do our utmost by creating that ownership and that accuracy on the data that clients will not spend a lot of time to get answers on entity information, right? And that's really what the question is about.

So I know that because of the population that we've used for this survey, it includes quite a number of sizable clients with a sizable number of entities. So that's why there is still a considerable amount of hours spent on a periodic basis.

Rogier: Yeah. Jonathan, you're very specialized in the startups, the unicorns throughout your entire CoSec career. You probably have spoken to a lot of GCs in those startups. They are smaller, but they do spend a significant amount on outsourcing . . .

R.J.: Correct.

Rogier: . . . and managing their [inaudible 00:36:41].

R.J.: And especially if it's still a limited amount of entities and if it's a new territory and if there's a lot of people watching a process, the senior stakeholders, the founders that really want to be kept up to date, then, in my experience, you will find the GCs that we work with, they're going to be very hands-on, and they want to know everything in and out. And it will take them time to become familiar, right? So we do quite a bit of handholding in these scenarios, where we really help them to properly and as smooth as possible enter a market.

Rogier: Yeah.

R.J.: What I'm trying to say, I guess, is that it's important to keep in mind that there's a little bit of context behind the numbers here.

Rogier: Yeah.

Jonathan: Yeah. So Rogier, I wanted to comment. And taking a step back on what you were discussing in the previous slide, what I've seen happening across our industry and on the client side in the past five years, essentially, is that a lot of people forget the impact that COVID had on the evolution of the workforce in general across the globe, but specifically for in-house legal departments. I've noticed an increase in the demand for legal operations manager or managers, essentially the task or the roles that GCs are looking for in these people are for them to organize whatever is being worked on in-house together with what has been outsourced.

A lot of that has to do with them wanting to have or recognizing that, especially during COVID, that they needed to have the visibility. They needed to have the control because even though the world stopped, legal entities had to still be kept in good standing, right? If you're limited in resources, you're unable to do so. If you don't have the technology, you would not have the visibility. So the evolution of this role I think has steered the evolution of corporate legal departments and the demand for GCs to have their teams have more control over what is being done on the corporate secretarial level.

If you can go to the next slide, going back to your question on the comparison between startups and let's say better setup companies or companies with many years of operations, like Fortune 500 companies, startups tend to set up in one country, and then the big ambition is to grow globally. When you're so focused on doing what you know how to do best, you most likely and what I've encountered is that startups do not have neither the resources, because, in the end, it becomes a sunk cost, and they don't have the knowledge or the experience.

Then on the right-hand side, you see that there's a significant amount of cost savings that clients have experienced with us, and a lot of that has to do because if a startup starts to expand its global footprint using local partners, such as law firms, with all due respect to them, they're specialized in legal counsel, litigation, other more important matters. Law firms prefer not to do the administrative task, and if they do, they tend to charge by the hour at a very costly rate because they also have limited resources.

So that's where we, corporate service providers, like CSC, provide that cost efficiency, and that's why you see the increase not in those cost savings, but also in the process efficiencies because, like we say at CSC, we're the business behind business. We know what we do. Part of our values is to be client-centric, focused on our clients. So as corporate service providers leading this industry, we take that very seriously. And that is essentially what companies that have a bigger footprint are looking for. And that's why you see, on the left-hand side, that the hourly spend with local providers is greater for companies that are bigger. And that goes back to what R.J. was saying on what the client pool was or the population we used for these statistics.

Nevertheless, the results of that analysis are accurate. And what we're seeing here from a data standpoint, with regards to the outsourcing and looking for efficiencies from a technology standpoint, from a fulfillment standpoint, from a cost reduction standpoint, are true and are accurate.

Rogier: Yeah. Thank you for that, Jonathan. The big elephant in the room, right, AI. How confident is your organization in governing AI use? Somewhat. Sixty-eight percent says very confident. I have my doubts with that. It might be very similar to the previous version that we had a Barometer Report that in-house legal teams were very confident about the compliance sensor of the entities, and we're now down to 7%. I think this going to have a similar path because what's the main internal barrier for AI adoption and legal and compliance, we see 22% is the integration challenges with legacy systems.

Again, we can't say it enough. Data is key here. But how valid is your data? We also have been speaking with multinationals that say like, "Well . . ." And it's just simple for when we go through onboarding and implementation, it's like, "Oh, I can't find my minute books. We need to recreate this from scratch, and this has a different naming convention. I can't find this anymore. Can you help me out with an entity management software?"

So integration challenges, yes. But if the data is incorrect and you let AI loose, you might get a different percentage going forward. Jonathan, [inaudible 00:43: 10]?

R.J.: That's the thing, right? Let's not pretend we're AI specialists here.

Rogier: No, not at all.

R.J.: But we do see, in our practice, AI is only as good as the data behind it, right?

Rogier: Yeah.

R.J.: And that data needs to be as accurate as possible. When entity records are incomplete, when ownership information is outdated, governance records are misplaced, fragmented, not entirely available, that can create holes. You want to as much as possible, for a variety of reasons, but in part also to properly make use of AI, you want to make sure that that data is as complete and as accurate as possible, for sure.

Rogier: Yeah.

Jonathan: I think that there are two main things that need to be addressed with regards to AI. The first one is, as the question states, how confident is your organization in governing AI use. AI is, although advancing at a very rapid pace, still at its early stages. What I would say is known is that data learns from data. Going to your point, R.J.

Nevertheless, I don't think that because it is well understood up to what degree the capabilities of AI can go to just yet, it is hard to say, or I think it's inaccurate to say that, yeah, any organization is properly governing its AI use, right? If it's an evolving thing, how can you be so sure and certain that the governance on top of that system is being done correctly?

And the second thing to be addressed is there's a lot of concern around AI taking over jobs in general across all industries. I've heard that in discussions with our clients and prospects. That concern is real. I like to say that AI, at least at this stage, is to be seen as a tool. It shouldn't yet be seen as a technology that's . . .

R.J.: [inaudible 00:45:21]

Jonathan: Yeah, a technology that's going to take over what humans do. I mean, yes, if you implement any of the AI tools nowadays, you'll be able to be more accurate in doing your minutes, drafting resolutions, finding information within documents. So yes, it should be leveraged as a tool to make the day-to-day work more efficient. And that is what the consequence of the implementation is showing.

Yet, I don't foresee AI taking over corporate legal jobs or corporate secretarial because there's a reality within our industry and what needs to be accomplished. If you're an organization, if you want to set up an entity in a region like Latin America, that is still not fully developed, as you mentioned before, R.J., you still need to have boots on the grounds. You still need to print out the document. You still need to sign it in wet ink. You still need to take it to the commercial registry, get it notarized, etc. AI is not there yet to do all those functions. And AI is really an intangible. It's not something that can deliver a service physically, like we're currently doing as corporate service providers.

Also, as a last point, if you do have technology like an entity management platform, which CSC has its own proprietary system and we encourage always our clients to take a look at it because it's more than 10 years award-winning, it's the way that we provide visibility and control to our clients on what our teams are doing from a fulfillment standpoint as a service to them. Yes, the AI is certainly something that should be leveraged by the client. We are in the works of implementing that as well to improve the functionality of our own platform, to make the user interaction from the client more efficient and better.

So we are, just as our clients, trying to stay on top of the of the matter. But as I said in the beginning, it's at its early stages, and we still don't know if it's finite or infinite, the capabilities and what the reach of those capabilities is with regards to AI.

Rogier: Yeah. And to echo R.J., when we started discussing this slide, we're not the specialists on AI. We're in the same carriage, so to say, bandwidth of trying to find out what's best based on reliable data.

The one thing that I want to highlight, as the last bullet point on this slide, is actually limited budget or unclear ROI. It has to do with the fact that it hasn't been rolled out completely across any organization, different divisions, etc., which we already start hearing from companies that are utilizing AI significantly that the cost of the tokens, that are used for AI, is becoming quite high. So I think, going forward, we'll see definitely an uptick of budget constraints as a higher percentage in this one as well.

But we're coming on top of the hour.

R.J.: Yeah. Maybe just one final comment from my side on that. So whether we're talking about expansion, compliance, outsourcing, or AI, the common theme for me is visibility on the data. Organizations that know their legal entity structure, trust their data, and have their governance processes, they are far better positioned to manage whatever changes and challenges that come ahead. And, of course, we're happy to support them.

Rogier: Exactly. So if you do need a streamlined service model and creating visibility and transparency on your entities, you do need technology and human interaction, like clearly stated by Jonathan. It depends also on the jurisdiction you're going into. Not everything can be done by technology, whether that's an entity management software or AI or data that is supporting this.

Jonathan: Yeah. My closing comment to the audience is don't only just look at the pros of AI, also look at the cons. We're starting to see publicly, in the news, bad experiences that have happened to big companies. The most recent one was Walmart, who had to shut down its engagement with OpenAI because they expected an outcome that AI was unable essentially to provide with their counters. So, again, it's still in the infant stage. One has to be cautious of when to chime in or to invest in it.

Rogier: Yeah. Thank you, Jonathan. Thank you, R.J.