Compliance in entity management is by no means a new concept. Entity regulation has only increased in the years following management scandals at Enron, WorldCom and, eventually, Lehman Brothers during the 2008 financial crisis. What comes to mind when a compliance officer thinks of increased regulation? The most likely answer is increasing layouts on hours for a department that does not intrinsically create revenue – an unfavorable outcome to report to executives.
The good news is that this can be avoided through modern best practices in entity management compliance. With these five strategies, compliance departments can begin to shape their increasing contributions to a thriving corporate culture.
Applying the Best Practices in Entity Management Compliance
Strategy #1: Increased Synergy
Synergy is a word that is famously overused in business, yet it is truly a simple concept: using two separate agents to create a contribution that is greater than the sum of their individual efforts. How does this take place in entity management compliance?
Entity management exists in multiple, discrete departments, each with a multitude of responsibilities that don’t overlap very often. Entity management will involve data and documents from legal, human resources, accounting, information technology and finance departments, at minimum. To take this a step further, the documents tracked during entity management compose the lifeblood of a corporation.
So, by having a better distribution and flow for these documents, the entire organization benefits. The name of the game here is compliance, and by using entity management technologies to increase synergy between compliance and any other given department, the corporation multiplies the non-negative benefits of a well-run compliance department.
Strategy #2: Manage Risk
The purpose of entity management is to mitigate risk. Each separate entity will isolate various elements of the corporation that would otherwise be unsuitable within the same organization. The compliance officer’s duty is to ensure that their colleagues adhere to the regulations that apply to the corporate entity to which they are responsible. In order to do this, the compliance officer becomes responsible for understanding the organization of a vast cache of documents across and between entities. By using entity management technology, the job of organization becomes easier, and the officer may focus more on the practices of ensuring compliance that are solely within their purview.
Just a few of the key tasks that the compliance officer is responsible for are:
- Composing mandatory filings
- Knowing filing deadlines
- Being well-informed on regulations in all relevant jurisdictions
- Maintaining necessary operation licenses
Having a centralized system for the necessary documents simplifies these processes and ensures that the corporation does not take on unnecessary risk. The right platform and interface will ensure that the compliance officer has the most time and the best information to keep up with an era of ever-more-strict regulation.
Strategy #3: Greater Corporate Governance Reach
One of the most frustrating problems that can be found in modern corporate culture is a lack of communication between entities. This can result at minimum in personal frustration, and at the more serious end of the spectrum missing a filing deadline. It sounds unconscionable to not have access to all necessary information, but it can be as simple as an accidental computer reboot. Without a system to collate all necessary documents and store them in a location that is accessible for all parties concerned, the officers responsible for compliance will not have the most empowered position possible, with the greatest reach to sort out issues in a quick and orderly fashion.
Strategy #4: Leverage Technology
These first three strategies only truly pay off if you are optimizing the storage, organization and use of your data. The technology will allow you to own a central repository where all of your documents are easily accessible, thoughtfully organized and secured for the long term. Corporations that do not take advantage of the powerful technologies available to them could become the target of hacks, eventually falling prey to data breaches, and there are endless examples of this. It is not enough to secure the proprietary information that allows corporations to remain in compliance with regulations; there must be continuing diligence on the part of those responsible. This pressure can be alleviated to an extent by using the right technology.
Strategy #5: Find the Right Fit
It’s easy to believe that technology will slot right in and solve all of the problems presented in less sophisticated forms of entity management, but in reality, acquiring the software is only the first step. You will need a dedicated team of service people to walk you through the transition, and to be available on a continuing basis for troubleshooting, upgrades and assistance with new product packages as you see fit.
One of the first questions you will need to answer are where the data will be hosted – does your corporation have the infrastructure and the information technology services to host it onsite, or would a better solution be to outsource data hosting?
After going through installation, you may find that your actual needs differ quite drastically from the needs you projected pre-installation – this is why it is never enough to acquire the technology alone. Not every program is perfectly customizable in its suite of options, so selecting a vendor that focuses on functionality across individual organizations will put your department ahead of the curve. The only way to take full advantage of the technology is to establish a long-term, mutually beneficial relationship with your vendor.
Why Entity Management Compliance is Critical
The truth about compliance is that it is a somewhat thankless job if you do it right – the benefits are only apparent once a mistake has been made. In order to not only avoid this, but to create additional value across multiple departments, the right entity management software and practices must be adhered to. This not only benefits the corporation, but lowers the man hours and stress levels of those directly responsible for compliance.
Blueprint OneWorld offers innovative, powerful solutions in entity management – solutions that truly empower the corporate secretary, legal and compliance departments. If you are interested in upgrading, switching or beginning with a new standard for your corporation, please call or email us.