Over the last few years, businesses faced more changes and uncertainties than ever before. The regulatory changes, the push for global transparency, digital trends and cyber security threats have compelled companies to revisit their workflows and processes to stay current. Meanwhile, global disruptions like the COVID pandemic, the looming recession, the war in Ukraine and other Black Swan events create even more uncertainty and call for additional resilience.
Today, many organizations look to increase their preparedness for unexpected events by adding flexibility, adopting the best GRC practices, improving their entity management and enabling digital transformation. This report sheds more light on the type of challenges organizations face today and answers the questions about what businesses need to build resilience and how entity management software can be instrumental in this endeavor.
Challenges Faced by Businesses in Uncertainty
Facing a certain degree of uncertainty is natural for any organization operating in the best of times. Companies manage both internal and external uncertainties while trying to implement their business planning and achieve their goals. Meanwhile, the level of uncertainty grows exponentially during global turbulence, involving regulatory, political, financial and other factors.
Internally, companies face multiple challenges related to governance and risk management. Typical situations creating internal uncertainties include lawsuits, financial issues, changes in ownership or directors and other unexpected events internal to an organization.
Externally, businesses operate in a global environment subject to novel challenges, for example, the pandemic, supply chain disruption, cybersecurity and digital trends. Other global risks include political unrest, global conflicts, economic disruption as well as new regulatory requirements introduced by legislation similar to the U.S. Corporate Transparency Act.
Under these circumstances, organizations need to build preparedness capacities to address new challenges while pursuing their business objectives. These new capacities should enhance the organization's governance and compliance, improve efficiency and increase resilience to help businesses be better equipped to adapt to change and respond to challenges.
How Can Businesses Prepare for Uncertainty?
Confronted by uncertainty, businesses need the ability to react quickly and have the necessary data at hand to make the right decisions. Companies with diversified structures need full visibility into their entities and a single source of truth for all their corporate data to navigate a changeable environment.
When companies go through times of distress, some organizations may be inclined to sell some of their operations to focus on their key business areas. Other players may take advantage of the situation and engage in distressed M&A deals to take advantage of the market. To this end, companies need to increase their deal-readiness and optimize their workflows to cut costs and time necessary for due diligence.
In any uncertainty, businesses need well-maintained entities to ensure compliance and avoid regulatory penalties, which can be hard to recover at the time of hardships. The internal teams must ensure timely filings and disclosures and have all their entities in good standing. In doing so, companies need to revisit their internal processes and workflows to provide their teams with effective technology and tools to ensure compliance at all times.
How Can Entity Management Software Help Build Resilience?
It is widely accepted that when companies seek greater visibility, easier access to their data and insights into their operations, they need to leverage technology and employ entity management software to address those needs effectively.
Below are a few scenarios of how entity management software can help businesses provide for the above and build resilience, increasing preparedness during uncertainty.
Litigation readiness
In a business setting, lawsuits are not uncommon and can involve ownership relationships, product or service issues, tax matters, intellectual property and commercial disputes. While organizations can minimize risk exposure with a diversified entity structure, businesses need a robust entity management system to trace and report the relationships among the entities, have all their data at their fingertips to be better prepared for litigation and enable prompt action.
Deal readiness
When organizations struggle through economic times, some companies may consider selling part of their operations to give all their attention and resources to core businesses. While selling a distressed business comes with additional risks for the buyers, companies need to advance their entity management practices to cut costs and speed up due diligence to ensure positive outcomes of their deal-making.
Changes in key stakeholders
The organizational changes, including changes of key stakeholders such as the board and directors, often create uncertainty and can be stressful for employees and the whole organization. Meanwhile, changes in ownership, board or directors should be timely reported, which requires collecting and filing multiple data points. Companies need modern entity management software to automate appointing directors, ensure data collection, storage and update, provide for timely filings and enable effective communication across the board.
Regulatory Changes
Global regulatory changes are among the key challenges for multinational businesses with complex organizational structures. The U.S. Corporate Transparency Act is one of the most explicit examples of how new legislation can affect organizations and impose heavy penalties, including imprisonment and personal fines. Meanwhile, modern entity management software, like Athennian, makes compliance with Corporate Transparency Act and other regulations an automated process by centralizing all corporate records, automated workflows, pre-populated templates and handy reminders.
Cybersecurity
As companies move their data into digital format and leverage remote working infrastructure, they need to address cybersecurity issues to combat cybercrime and ensure the safety and security of their data. Modern entity management software provides teams with the ability to safely access all corporate data from anywhere on any device with various levels of access while ensuring the integrity of all corporate records.
Learn More with Athennian
With industries facing disruptions and global challenges, modern organizations need an additional layer of resilience to operate under an increased level of uncertainty and pursue their business objectives.
Entity management software offers this extra layer of resilience by ensuring full visibility into organizational structure, instant access to all corporate records, automated compliance and efficient workflows. If you wish to learn more about how entity management can help prepare your business to operate at a time of uncertainty, please don't hesitate to contact the Athennian team for a free consultation and demo.
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