When it comes to the legal status of any organization, the buck stops with the General Counsel. A company’s in-house final word on all things legal and compliance, the General Counsel is “the most senior lawyer in an organization, employed to manage legal work on behalf of the organization,” writes Paul Gilbert for The In-House Lawyer.

However, he continues, “a GC does not have to have practised law, does not have to be employed on a permanent contract and might not do or manage much or any legal work either.” This means the General Counsel’s remit is quite vague, lacking in official boundaries, though everyone involved has a general idea of what the role’s responsibilities involve. They wear many hats, with daily duties often including financial, business development and compliance matters.

And when it comes to entity management, the General Counsel does have a significant role to play. The arbiter and guide of all things governance, the responsibilities of the General Counsel for entity management include, but are not limited to, the following:

1 Acting as Chief Legal Officer

In this age of heightened risk and global regulatory movements, the General Counsel often fulfils the role of Chief Legal Officer on the board, particularly for publicly traded companies. They are the most powerful legal executive in the organization, helping to minimize legal risks by advising other officers and board members on any major legal and regulatory issues the company could face, including litigation risks.

2 Managing the whole entity life cycle

While the in-house legal team will often take on the responsibility for creating and closing down individual entities as part of overall compliance work, it is ultimately among the responsibilities of the General Counsel for entity management to manage the entire entity life cycle. From seed and development, to startup, to growth and survival, to expansion, to maturity and possible exit, all stages of the business life cycle and entity life cycle must be controlled by the General Counsel’s own strategy for the organization.

3 Contract management

The General Counsel is also ultimately responsible for contract management within an organization and its entities. They must decide the process for handling, agreeing and monitoring any contracts the entity signs, as well as any licenses or certifications it needs to be able to operate legally. It’s one of the responsibilities of the General Counsel for entity management to ensure the entity can continue to operate in good standing wherever it is incorporated.

4 Performing due diligence

This responsibility to ensure that the entity can legally operate leads to the fourth responsibility: that of due diligence. The General Counsel must analyze the entity’s operations on a regular basis to ensure that all processes are being adhered to, that all entities maintain the right status and are compliant, that corporate financing and accounting is being handled according to rules and regulations, and so on. To fulfill this responsibility, the General Counsel needs a single source of truth for all entity management; this helps to ensure that they are working from the latest available and accurate entity data.

5 Integrated risk management

And now come the risk-related responsibilities. It’s no surprise that the Chief Legal Officer would have some risk management responsibilities within an organization, and it’s the General Counsel’s role to take an integrated approach to risk management. This is not something that can be handled in silos; the entire organization’s risk profile must be assessed and monitored, ensuring that nothing one team is doing will have an undue impact on another team’s work. An integrated approach to governance, risk and compliance is essential to the modern corporate world.

6 Managing the organization’s risk profile and appetite

The General Counsel and entity management work must also look at legal risk management, specifically the organization’s appetite for risk – what it is and isn’t willing to go after or accept in the pursuit of growth and strategy. This means the responsibilities for the General Counsel in entity management include defining and owning legal risk management. They must look at the organizational structure and skills that are needed to ensure appropriate management of legal risk; define what good legal risk monitoring and reporting looks like; own the interaction with regulators; and look into how technology can enable better legal risk management.

7 Balancing organizational risk and corporate objectives

All of this work on risk is not done to stop the organization from taking any chances – far from it. It’s the role of the General Counsel to ensure that the organization has a healthy and manageable risk appetite – that it is not afraid to take a risk, but that it assesses and analyzes that risk from all angles to understand whether it’s able and willing to take on the burden if things don’t go according to plan. The General Counsel must advise the board on the question of risk vs. strategy.

8 Assessing legal structure risks

The General Counsel must also lead any review of structure and entity rationalization projects to ensure the structure continues to operate efficiently. To do so, they will often lean on organizational charting, or entity diagramming, to create a visualization of the entire structure. This can then help them to pinpoint any weak spots or gaps in the market, to see if there are any compliance issues in any entity, and to analyze the full complexity of the modern enterprise as it gains in size and complexity.

9 Overseeing structural changes

The General Counsel is ultimately responsible for the way an organization structures its entities. It is up to the General Counsel to decide the most appropriate entity type for operations in each jurisdiction, to ensure the various entities don’t clash or compete in any unwarranted ways, and to ensure each entity can remain in compliance both locally and internationally without causing major concerns for the parent company. They will often opt for a parent-subsidiary model, once the tax and investment needs of the organization as a whole are taken into account.

10 Advising the board on strategic growth opportunities

Finally, all of the above lead into the General Counsel’s most important role in entity management. As Chief Legal Officer, as the one in charge of an organization’s risk profile and appetite, and as the overseer of legal structure risks, the General Counsel must advise the board on strategic growth opportunities. They must use all of the entity management and entity data analysis tools at their disposal to ensure the board is fully aware of what may happen in any eventuality, and to steer executives toward an appropriate legal and compliant choice for strategic growth.

How to support the responsibilities of the General Counsel for entity management

All of these responsibilities rely on similar things: seamless communication, efficient working, robust data and 24/7 access to real-time information. However, these are not guaranteed aspects of day-to-day life in an organization, no matter how large or small, how contained or spread out its structure may be.

Many organizations and in-house legal teams are increasingly turning to technology to help support the work done by the General Counsel for entity management. By leveraging entity management systems, legal operations departments can create a central repository for the corporate record, a single source of truth that means everyone involved in entity management is accessing the same data from the same source. It means no more risks around version control and human error being introduced into the information flow.

Diligent Entities is one such entity management system. It helps organizations to centralize, manage and effectively structure their corporate record to improve entity governance. This, in turn, helps to better ensure compliance, mitigate risk and improve decision-making through an integrated governance solution.

Creating this single source of truth enables the General Counsel and the in-house legal department to store entity information, documents and organizational charts in a highly secure format, enabling the management of the ongoing accuracy of the corporate record using compliance calendars, reminders and workflows for better data. The General Counsel and entity management become a seamless team with help from entity management software, which can also deliver reports on governance and compliance requirements and electronically file statutory forms into global regulatory bodies.

In addition to supporting the responsibilities of the General Counsel for entity management, Diligent Entities also seamlessly integrates with Diligent Boards and a secure file-sharing platform to create the Governance Cloud. This all-in-one governance ecosystem enables the General Counsel to create a unified approach to all of their organizational responsibilities, ensuring the right people get the right information at the right time.

Get in touch and request a demo to see how Diligent Entities and the wider Governance Cloud can support the responsibilities of the General Counsel for entity management, and drive modern governance processes in your organization.