Effective corporate governance is critical to meeting an organization’s objectives. However, corporate governance is an extremely complex system of processes, practices, and rules. As such, many corporate entities inadvertently adopt a reactive corporate governance strategy.
Reactive corporate governance can be detrimental to the long-term success of an organization. A reactive stance on corporate governance can manifest itself in many ways.
However, one sure sign that an organization is being reactive in its approach to corporate governance is that it has an abundance of data that is unstructured and nearly unusable.
Additionally, reactive organizations typically rely on outdated entity management software and a smattering of legacy systems that do not effectively share information. This lack of communication between technology solutions can hinder productivity and reduce a team’s efficiency.
Fortunately, there are several ways to right the ship if your organization has become too reactive. If you want to begin practicing proactive corporate governance, then we suggest that you consider these 5 tactics:
1. Keep Compliance Deadlines Top of Mind
Missing compliance deadlines can have serious implications for your organization. Most notably, missed deadlines often give way to hefty fines. Allowing fines to pile up can also negatively impact departmental morale and the team’s reputation.
While there are several ways to improve the visibility of compliance deadlines, the most effective approach is to integrate calendars with your entity management software. Integrated compliance calendars will send periodic reminders of upcoming deadlines so that your personnel can submit all required documents on time.
2. Maintain Visibility of Upcoming Regulatory Changes
Another key component of proactive corporate governance involves maintaining visibility of upcoming regulatory changes.
If you are taking a reactive approach, you may find yourself struggling to comply with new regulatory requirements on short notice. This struggle can place quite a bit of undue strain on your staff and may cause you to incur violations.
Implementing entity management software is the best way to ensure that you never lose sight of impending regulatory changes. Modern, cloud-based solutions can help you track regulatory changes, implement requisite protocols to adhere to these requirements, and avoid any compliance nightmares.
3. Eliminate Data Silos
Collecting massive amounts of data has become the norm for corporate legal departments across the nation. However, far too many of these departments are unable to tap into this data because it is unstructured and disorganized. This problem is exacerbated by data silos.
A data silo is created when information is accumulated on a particular platform or in an application’s database but is not disseminated to other software. If your various applications are not communicating, data silos are being created. Data silos can lead to inconsistencies in the information contained in your various applications.
Organizations that practice reactive governance typically have staff members backtrack and correct out-of-date information periodically. This work is an extremely time-consuming, tedious, and inefficient endeavor.
Conversely, entities that are practicing proactive corporate governance address this issue by eliminating data silos. This work is accomplished by implementing entity management software and integrating it with other systems and applications.
4. Understand Cost-Per-Entity
When an organization practices reactive corporate governance, many valuable data points get lost in the shuffle.
One such data point is cost-per-entity. While any corporate legal team will have to “rediscover” this information when filing quarterly and end-of-year reports, reactive organizations typically give little thought to this metric until they must.
If you want to improve organizational transparency and implement proactive corporate governance, then you must have a clear understanding of cost-per-entity at all times.
This information will help legal and accounting teams work together for the good of an organization. Together, these teams can closely monitor cost-per-entity throughout the year and explore ways to decrease this expense.
5. Invest in Entity Management Software
If you truly want to embrace the concept of proactive corporate governance, adopting a leading-edge entity management software solution is vital. The latest generation of entity management software can revolutionize virtually every corporate governance process as it pertains to your in-house legal team.
In addition, a cloud-based entity management software, such as the one developed by Athennian, can significantly enhance your legal team’s overall efficiency.
With Athennian, you can automate redundant processes, ditch outdated technologies, and work more efficiently. You can also improve compliance initiatives, gain a better understanding of cost-per-entity, eliminate data silos, and enhance transparency across the entire legal team.
Athennian includes a dynamic suite of tools and functionalities that are designed to facilitate proactive corporate governance, including:
- Custom report generation tools
- An entity overview dashboard
- Corporate information sheets and templates
- A virtual minute book
- Visual organization charts
- In-app live chat functionality
- A user-friendly feedback center
Athennian is unquestionably the best entity management software solution on the market. But don’t just take our word for it — request a customized demo with an entity management expert and experience Athennian for yourself.