A robust organic growth strategy not only expands a company’s reach, market share and operations, but it also sends powerful signals to investors and talent alike about a company’s health, ability to innovate, and potential future performance.
Many companies and industries view organic growth as more important than ever in light of the COVID-19 pandemic. Strategic organic growth helps businesses pivot operations in a disruptive landscape, solidify their competitive advantage, and evolve products, operations, and markets for a shifting future.
“Europe, the epicenter of the outbreak for most of March, garnered consistent interest across the first quarter of 2020. Velocity Global received more enquiries from businesses planning a move into the continent in this period than in any other quarter over the last five years.”
–Ben Wright, CEO, Velocity Global
Here’s how the general counsel (GC) can be a strategic advisor for organic growth—and the tools that can help.
New Markets Bring New Questions and Complications
Organic growth expansion is harder than it looks. New jurisdictions mean new rules and requirements, which introduce a host of questions:
- What are the legal and regulatory costs of entering a new jurisdiction?
- How would the company’s compliance obligations change?
- Would it be more advantageous to establish a new legal entity in this jurisdiction, or to enlist a local partner to act as the company of record?
Given their oversight of legal issues and compliance across all of a company’s jurisdictions, GCs are well-positioned to deliver guidance and help their companies be more agile. For example, GCs offer valuable perspective into the risks and costs in the operating landscape.
A GC’s perspective is even more effective when it is backed by a centralized corporate record and entity management software.
A Centralized Corporate Record’s Growth Potential: Capabilities Beyond Compliance
“As organizations look to grow and increase their total addressable market, many are looking to expand into new jurisdictions. It creates new levels of complexity because there are new obligations that you have to abide by.”
-Neil Barlow, Senior Director of Sales, Entities and Compliance, Diligent
A centralized corporate record is a single system that stores data and information for tax, legal, finance and compliance business units. Additionally, it consolidates all the forms, documents and data for a corporation’s subsidiaries. This includes vital information like operating licenses, corporate registrations and signing authorities.
GCs and legal departments are likely most familiar with a centralized corporate record’s use for compliance and entity management. But a centralized corporate record can be a powerful tool for organic growth, as well.
First and foremost, a centralized record puts all the relevant data for evaluating a market—new or existing—in one place. This “single source of truth” means that departments have one authoritative place to go to find licensing requirements, organizational structures and more. The right entity management software makes information secure and easy to access for people with the appropriate permissions.
By providing a single source of truth, a centralized record also supports good governance practices—for example, helping the GC and legal department assess risk; assign ownership and accountability; and build policies, measurement and reporting systems. This further empowers GCs to proactively advise on new opportunities and ensure more confident, efficient compliance when the company does decide to expand into a new jurisdiction.
Doing More with Less as Operations Expand
The business imperative in challenging times: Expand operations using fewer resources. Many corporations have siloed systems that work counter to this goal. If you require people to update multiple systems, they’re doing double work—which is less efficient and cost-effective. Additionally, needing to verify and reverify the accuracy and completeness of the data that’s required to enter a new jurisdiction or new market merely slows the entire process down—and may result in a missed opportunity.
A centralized corporate record reduces friction in pursuing growth opportunities by standardizing one system for every department’s data collection and management. A centralized record powered by entity management software streamlines processes even more by:
- Automating workflows for cumbersome tasks like document verification
- Eliminating data redundancies
- Keeping teams on top of important application and regulatory deadlines
- Delivering answers to commonly asked questions that frees up the legal team for higher-level tasks and opportunities
No Need to Reinvent the Wheel
“Eighty percent of what you need to know is going to be consistent around the world. It might be called something slightly different and the requirements might shift a little, but if you live by the 80/20 principle, you’ll make things easier on yourself when going to new jurisdictions,” said Samantha Wellington, SVP, Chief Legal Officer and Secretary with TriNet. “Standardize that as much as possible. You’ve just freed up a huge amount of time.”
Every entity in a corporation might have 100 or more unique data points, and a corporation’s entities can number into the hundreds or thousands. Collecting and managing all of these data points manually, particularly when pursuing organic growth opportunities, is cumbersome. By offering reusable templates and other assets, entity management software equips GCs with a time-saving superpower.
From basics like entering a company name and registration number to setting up a signing authority and slate of directors, a centralized corporate record ensures that each new growth opportunity does not require rebuilding the same documents and processes from scratch.
Entity Management Software: a Governance and Strategy Tool with Enduring Value
Once implemented, an entity management solution enables the GC and legal department of a globally expanding company to:
- Standardize data collection and reporting
- Complete applications and reporting faster and more accurately, with less stress
- Reduce manual labor and cycle time
- Fuel good governance practices across jurisdictions and business units
With the right entity management solution, the GC and legal department can access entity information, documents and data from a single, secure place and manage its ongoing accuracy. This single source of truth, supported by a robust array of features, supports GCs in their role to deliver the right information to the right people at the right time.
GCs and the companies they serve are then well-positioned for evaluating and expanding operations into new markets—through the current business environment and beyond.
A single source of truth is critical to any strategic growth initiative. See why in our free white paper, “Driving Strategic Growth with a Centralized Corporate Record.”