When it comes to the task of identifying and preventing legal and compliance risks, organizations growing and changing in today’s business world need to focus on standardizing manual processes and investing in software that increases the automation of these everyday tasks, leaving departments like Legal and Accounting able to better focus on their core competencies.
This means primarily having a robust corporate governance program, the essential goals of which are grouped under the increasingly common term “entity management.” The purpose of entity management software (hereafter EMS) platforms is directed essentially at three different objectives:
- Increasing efficiencies: By cutting out manual processes, expediting the formation of new entities and ensuring that regulatory requirements are met, EMS frees the legal department to spend more time on the long-term strategic goals of the organization;
- Ensuring compliance: Investing in a robust EMS positions the organization to achieve improved governance, risk and compliance standards in a world in which tracking changes in them becomes more complex by the day; and
- Mitigating risk: When data is unified and accurate, it transforms and eases the ability with which large organizations like yours can manage it, particularly with respect to the ability to locate quickly the right data and to respond effectively to requests from key stakeholders.
Effectively, a good EMS platform centers around a single source of data truth. The data repository or vault comprises a single space created by software that contains the corporate data and documents that comprise operations for the many overlapping entities that make up a large organization. These data banks are sorted so as to be easily searchable and use group permission functions to handle access, track content creation and editing.
8 essential entity management software features
A wide variety of stakeholders, from the Board and the C-suite on down the corporate ladder to the corporate secretaries and the paralegals, stand to benefit from such a robust EMS platform. This post discusses eight essential features your organization should be looking for as it considers adopting a new EMS platform or upgrading its old one:
1) Centralizing and automating
Organizations invest in software for three reasons: to make money, to save money or to reduce risk. An effective EMS solution should help you to do all three by centralizing and automating the process of data collection, maintenance and reconciliation.
Consider that the maintenance of minimum corporate requirements for just one subsidiary can take seven to 15 hours each year. Now multiply this across all the entities in your organization and the different regulatory frameworks in which they operate. Consider how EMS can help you through the difficulties of siloed information.
2) Flexibility and scalability
A software platform must be able to fulfill the needs of your organization, not only as it presently exists, but as its future needs change and expand. An effective EMS solution can keep and even increase efficiency in its features and functionality as an organization grows. It can meet the demands of all key stakeholders across the jurisdictions in which they operate, as well as adapt to the different requirements of specific industries and sectors within which your business operates.
Thinking about the future also means considering the ways in which your EMS can develop to serve the needs of your company. Hence why considering the corporate vision of EMS vendors as you choose among them is so important. You should understand where potential vendors are placing their R&D investments to see better what features and functionality will be available in the future as your relationship with them deepens.
Most of all, you should be considering only those software vendors that have broadly compatible goals and commitments to corporate governance with your own organization. This commitment, combined with unstinting effort to meet the requirements of the latest regulations, including FATCA, GDPR and SMCR, can make (or break) your governance strategy in the long term.
Buyers need to understand the reputation of a vendor prior to committing to them. In a best-case scenario, you’ll select a leading EMS vendor with decades of experience in the field that also has the ability to collaborate with companies such as yours while using best-in-class functionality to continue achieving excellent governance, risk and compliance standards.
Conversely, when selecting an EMS vendor, some organizations only consider up-front cost. This is short-sighted. Selecting one vendor can have the effect of imposing a path dependency on your organization because of the laborious process of migrating data. This can, over the long term, compound your problems and increase costs — precisely the opposite of what you hope to accomplish at the beginning of this process.
Choosing which vendor to go with is only the start of what is almost always a lengthy, and sometimes a painful, process of implementation. The first is necessary, the second isn’t, or at least, not all the time. Ongoing service of a high quality for your EMS program is essential to ensuring its long-term success.
Ask your potential vendors about rep availability, onsite visits, quarterly product releases and updates, training, availability of transparent manuals, webinars and customer newsletters that help you get the most out of your new platform.
6) Required capabilities for success
The minimum solution requirements that are needed to solve your entity management difficulties are also called required capabilities. It is important to ensure when talking to each vendor about their invariably thorough list of features that they all translate in some way to the accomplishment of your specific business goals: once again, increasing efficiencies, ensuring compliance and mitigating risk.
The vendor you choose needs to be fully committed to providing assurance of safety controls and practices through third-party certifications and audits. A good EMS partner should be able to walk you through exactly what you need to know about security and make sure you understand the exact parameters of the security associated with their platform. You want not only world-class security but a firm that hosts their own equipment. Bring this up early and often in the conversation.
Corporate data breaches are becoming more commonplace as hackers, bad actors and rogue agents get more sophisticated. For example, in 2017, the well-known consumer credit reporting agency Equifax was the victim of possibly the costliest data breach in history when hackers took advantage of weaknesses in the company’s web application to gain access to the data of over 143 million customers.
The price tag of the breach (estimated at $400 million) may pale in comparison to the damage to the firm’s reputation and the widespread loss of trust among consumers. You should know the ins and outs of how your potential EMS vendor is guarding your data against breaches and its protocols to control the damage if the worst should happen.
Considering each potential EMS vendor means assessing their experience in your particular sector or sectors. Blueprint OneWorld’s EMS platform, for instance, was developed by corporate secretaries, for corporate secretaries. We have been providing governance solutions to the full range of corporate needs for over three decades in nearly 150 countries, with clients in the Fortune 100, FTSE 100 and ASX 50. Blueprint, as part of the Diligent Governance Cloud, has R&D investments that exceed — by a mile — those of our closest competitors.
Put this together with our corporate vision driving our constantly improving strategies for governance, management and compliance, and our platform’s flexibility to suit the needs of both established multinationals with thousands of entities as well as growing mid-market companies, and we are confident that we can serve as your organization’s entry point and constant partner in establishing governance best practices. Please call or email us today to discuss our solutions.