Businesses don’t just happen; there’s sometimes years of planning and strategizing before that first business entity is incorporated. And businesses don’t just run; there’s a whole team of operations specialists, the cogs in the wheel that make sure each business entity is legally able to exist, that it fulfills all of its regulatory commitments, that it has robust governance and compliance processes built into the company culture.
You guessed it – businesses also don’t just end. In fact, any sort of organization operating in the modern world must pay eagle-eyed attention to compliance throughout the business entity lifecycle. Wherever your organization and its business entities sit in the seven-stage business entity lifecycle – from seed to start-up, growth to established and expansion, decline to exit – there’s myriad stakeholders to involve, filings and contracts to handle, signatures to obtain. And that business entity management, the process of getting approvals for every aspect of the business entity, can easily become a nightmare if you don’t pay attention to smooth operations and streamlined compliance.
Could eSignatures help to end the business entity lifecycle approval process nightmare?
Take, for example, the process of getting sign-offs for regulatory filings or new contracts. It’s a seemingly straightforward process – hand over the paper and get it signed – but unless your stakeholders are in the same office as you, it can involve getting documents sent by email or snail mail, and waiting for the signed version to come back to you when it’s ready, before you send it on or store it securely in the business entity management system. Let’s face it – it probably also includes plenty of chasing after the signature, too.
If you don’t have an adequate process to get documents signed and stored securely, you’re placing your organization and its business entities at compliance risk. And not only is downloading a document to email it or mail it for signatories’ attention fraught with risk – risk of it being lost in the mail; risk of it being intercepted; risk of it going missing – it also adds days, maybe weeks, to the signing timeline. This need for signatures has historically been one of the main barriers to in-house legal departments adopting new technologies for business entity lifecycle management, but the dependency on paper, pen and ink can also result in wasted time chasing down signatures – not to mention the mountains of paper that then need to be securely stored somewhere.
When it comes to business entity compliance, time and security are of the essence. Any hours or days you can save means more time available to be more proactive about strategic entity management, which is why many organizations have turned to electronic signature solutions, integrating them into their governance and compliance processes. Digital signatures also mean there’s less paper mounting up, helping to save precious resources and requiring less physical infrastructure for storage – no more rows of filing cabinets for the corporate record; it can all be stored securely in the cloud.
What are eSignatures?
Digital signatures, or eSignatures, are like electronic “fingerprints,” writes DocuSign, one of the leading providers of eSignature software. The digital signature securely associates a signer with a document in a recorded transaction using a standard, accepted format called Public Key Infrastructure (PKI) to provide “the highest levels of security and universal acceptance.”
When added to entity management software, digital signatures have three major benefits:
- Efficiency: Having eSignatures combined with entity management software means you create a digital document, get it signed, and archive or store the signed document all within one system – and that means a reduction in manual errors, as well as lots of saved time.
- Auditability: eSignature options can create an audit trail for signed documents, tracking the document’s movements, who’s accessed it and when it has been signed. Reports can be created to show which documents are missing for which business entities, giving you complete visibility into the process.
- Increased security: Truly digital signature solutions – not a hybrid process of scanning and uploading emailed documents – help to increase security. Emailed documents can easily go astray or get into the wrong hands; integrating eSignatures into your entity management system keeps everything within the same ecosystem, mitigating the risk of fraud, stolen information and manual errors across all business entities.
Ensure good governance and compliance with strategic entity management
Having the end-to-end compliance process within one system not only brings legal operations into the modern age, it also makes those in charge of compliance and governance for business entities less reliant on manual processes, in turn freeing them to be more strategic about entity management. Legal operations and compliance teams can quickly respond to enquiries by accessing the appropriate and correct signed and compliant documents, reducing the time spent searching for documents.
When your entity management system enables digital signatures, it helps to ensure the right information gets to the right people at the right time. Enabling signatories to sign off digitally not only brings down that timeline for compliance, but also adds a more secure layer to the sign-off process – because it all happens in the cloud, there’s less risk of things going missing.
With directors under increasing scrutiny and pressure to exercise good governance and fiduciary responsibility, that “right information, right people, right time” aspect becomes ever more important – especially with multinational organizations or larger subsidiary structures. Everyone is busy, notifications can easily be missed, and time zones make cross-border working a thing of carefully orchestrated scheduling. The easier you can make it for a signatory to get the right document, fulfill their director duties and get the document to where it needs to go next, the more likely you are to complete the process on time and on schedule. Digitization of compliance, plus eSignature capabilities, help you to regain control over compliance and governance processes.
End-to-end compliance technology
Diligent Entities now integrates with DocuSign – the only Digital Transaction Management company that offers cloud-based, customer-controlled data encryption within their own data center – to provide an efficient, auditable, secure signature workflow process. The eSignature workflow in Diligent Entities allows for documents to be sent for signature, tracked by status, recorded in an audit trail and stored as signed documents within Diligent Entities. By managing the end-to-end signature process within Diligent Entities, organizations can avoid duplication of effort and manual errors, reducing the time it takes to manage the signature process across multiple documents and signatories.
This integration makes Diligent’s Governance Cloud even more robust, enabling end-to-end governance and compliance management from within a single system, covering the entire business entity lifecycle. Get in touch and schedule a demo to see how Diligent’s Governance Cloud can help to boost your compliance outlook.