Good governance, legal & compliance all go hand in hand to keep top corporations functioning at their peak. With a new reputational threat in the news every day, a strong legal arm to manage all internal and external compliance regulations is key in the every-changing global environment. When businesses get large, it can become nearly impossible to manage all entity and compliance requirements in an Excel spreadsheet. For example, many corporations are able to adapt to regulations and compulsory fillings in their country of incorporation or where their home offices reside but struggle to keep aware of changing compliance regulations related to any global subsidiaries or newly acquired through M&A. Becoming a the watchdog for your corporations legal compliance becomes a key function for many legal professionals functioning on the global scale.
While many are aware of the legal requirements of a burgeoning business, constant awareness is required at every stage of a business’ life cycle as pertains to compliance. Larger changes like a multi-entity restructure or merger process are apparent but day-to-day business require legal professionals to be nimble. From internal legal requests related to new sales to researching new proposed taxes that can impact the business to maintaining legal records for the business to ESG concerns from the board, legal compliance is a field requires flexibility and the right tools – such as a robust entity management software – to continually be successful.
Legal teams and their organizations have a lot to manage both within their organization and as pertains to regulations outside of their company. Entity management lies at the heart of legal team functions. Managing the details between mergers and acquisitions; reconciling the shifts of personnel and policy that occur during restructuring; and navigating the complexity of regulatory and compliance measures all require a high-functioning legal team. Without a reliable entity management technology platform, legal teams are deprived of the accurate data and information they need.
The right entity management software provides the data and information that the right person needs at their fingertips. With a single source of truth, there’s no need to wrangle down data, dig to find the right document at the last moment or confirm it’s accuracy.
Compliance and corporate governance are paired together in most organizations for several logical reasons. To start, many of the same players are involved in both corporate governance matters and compliance issues – such as managing a relationship with the board or managing compulsory filings. Both governance and compliance involve rules of conduct and controls on behavior. In issues of compliance, those rules originate from external sources. These may be legislation, contracts, industry standards or other policies that obligate the company’s response. Compliance policies are not optional; these requirements must be met in order to stay within the bounds of the law. Enforcement consequences for noncompliance might include penalties, fines, legal action, loss of contracts, and revocation of licenses or permits. Good governance is not also optional for any organization aiming for success.
It is hard to overestimate the value of the legal department within a contemporary business organization. In addition to executing litigation procedures, legal departments manage contracts, mergers and acquisitions, while ensuring regulatory compliance and protecting the organization from risks such as fraud, bribery and insider trading.
But despite all of the responsibilities of in-house counsel and paralegals, there are scenarios in which a corporation is best served by quality outside counsel. In an environment of increased regulatory scrutiny, corporate management and boards may turn to outside counsel to help address issues of risk and liability. The most common reasons to engage outside counsel include audit committee investigations, shareholder derivative lawsuits and corporate risk analyses. In addition to the specialized knowledge that outside counsel brings to these subjects, its independent position in relation to the corporation is a valuable legal asset.