In an in-depth study into the changing nature of General Counsel (GCs), Kathryn Britton, a partner with KPMG, described the value of the GC’s presence in the boardroom this way:
“General Counsel have a holistic view over a business…supplemented with their legal expertise, they are ideally placed to take a proactive role in advising the company on risks and opportunities.” This picture of a newly imagined and empowered GC seems in keeping with the growing multitude of demands and expectations that companies place on their legal teams. As chief architect of that legal team, the GC must navigate the realities of day-to-day regulation and litigation while advising on the company’s future direction.
In fact, a recent report on the evolution of the General Counsel broke the “new” duties down into three key roles. In addition to the legal work you perform for the company, many organizations want you to be:
- A Business Leader. As a business leader, you must provide sound legal advice to board members and other managers based on your legal acumen and your overall understanding of the company’s values and interests.
- A Risk Manager. As a risk manager, you must be constantly vigilant, both to outside threats to the company and to the company’s own risk-taking ventures. As part of this role, you are expected to be fully versed in the technicalities of compliance and in the full array of regulatory obligations by which each entity must abide.
- A Key Communicator. As a key communicator, you must articulate trends, positions, analysis and legal standings to stakeholders like board members or prospective investors, while also effectively communicating company initiatives to regulators and internal team members.
Given all of these challenges, that holistic view that Britton describes can easily become a distracted view. It’s the problem of the one-eyed cat staring down two mouse holes. What’s needed is a centralized source of secure, accurate, complete information. In other words, what’s needed is an entity management platform.
Entity management platforms are software tools used by legal teams and corporate secretaries to manage the vital business data of entities large and small. Boiled down to its core essentials, entity management allows you to:
- Stay current on the fiduciary, statutory and regulatory responsibilities of a business entity, its directors, officers, managers and partners.
- Better advise the board, management and committees on corporate governance matters.
- Maintain a consistently accurate corporate record that reflects all transactions, filings, reports and audits.
- Provide secure access to the corporate record to support the work of your legal team of select members of other departments as the need arises.
Due to increased regulatory attention both in the US and elsewhere, companies are finding themselves required to track and report vast amounts of information and to make that information readily accessible. Some of that legal entity information includes, but is not limited to:
- Legal names and identification numbers.
- Office addresses and contacts.
- Date of entity formation or dissolution.
- Entity directors, officers and managers.
- Entity type and country of central operation.
- Registered agent information.
- Critical entity dates, such as board meeting and annual meeting dates.
- Critical entity records, such as articles of incorporation, bylaws and contracts.
An entity management platform can organize all of that information and keep it current across the whole set of entities, registering changes as they happen and providing a central repository for that information. In addition, this data trove is aligned with reporting and auditing functions, and each document is fully searchable, so you can dig down and get the details you want when you need them.
So, that holistic thing is starting to look a little easier to accomplish, right?
This will make fulfilling the role of business leader that much more possible. You cannot give sound advice unless you have a big picture of the current state of the company, and that is what a centralized, fully searchable entity management platform can provide. But what is equally attractive is that entity management platforms can also help you manage risk and communicate company initiatives more effectively.
In the GC’s role as Risk Manager, one thing that needs to be on her mind is data security. One of the benefits of the centralized data repository is that it is easier to secure. Rather than having data scattered across multiple databases, your vital information will be safely hosted in one secure location. Most quality entity management platforms offer data hosting, or they can work with you to optimize your current hosting situation.
In addition to security issues, a quality entity management platform provides compliance protection for all of the company’s corresponding regulatory needs. This feature allows GCs to:
- Track entity attributes, capital structure, management structure and ownership information.
- Maintain accurate records regarding which jurisdiction each entity files in and each corresponding annual report.
- Understand country-by-country entity requirements for all subsidiaries outside the US.
- Access the company compliance calendar for filing due dates and mandatory board meetings.
While the entity management platform gives you a way to organize and access all of this compliance information, it won’t fall entirely on GCs to act on it. In fact, some simple filing situations can be automated, or reminder notices can be sent out to alert appropriate team members of the need to file compliance information.
The last of the three roles GCs must fill moving forward is that of Key Communicator. Whether advising a board member, instructing a team member or dealing with an outside regulator, the need for clear, concise, data-driven communication is always high. Entity management systems provide reporting, tracking and auditing functions that make it possible for you to visualize the data your company produces and to share it effectively with other stakeholders. Furthermore, by providing secure, traceable access points to documents and data, entity management platforms allow GCs to collaborate with team members from other departments, fostering a community of shared competence and unified results.
The expectations for General Counsel are growing and evolving every day. If your legal team is being asked to do the impossible, it may be time to look at what an entity management platform can do for you.