Today, many businesses rely on their Governance, Risk and Compliance processes to steer their organizations toward their goals, manage risks and ensure compliance with regulatory requirements. However, many of these businesses have inherited old approaches that don't work well in the ever-changing legal environment and don't allow them to scale up effectively.
This report focuses on the importance of applying best practices for compliance work to avoid common pitfalls faced by companies relying on traditional methods and practices. Below we go into more detail about the criteria for compliance, checking your current compliance status and using entity management software and other legal tools to stay on top of your compliance work.
Determine Criteria for Compliance
Any sound compliance strategy should have clear metrics to measure your current compliance level and how effective you are in maintaining it. Given that your organization is aware of all relevant regulatory requirements, you also need to identify all applicable compliance criteria and set a plan for how to meet them.
For example, when it comes to legal entity management, you will need to:
- keep all corporate records up-to-date,
- provide for all required filings,
- observe filing deadlines,
- maintain operating licenses for each jurisdiction,
- stay on top of applicable regulations,
- ensure fulfillment of internal policies and procedures.
Due to the quickly changing regulatory environment, companies should regularly revisit and revise their compliance criteria. The updated metrics should be effectively communicated across the whole organization to avoid siloing information and ensure the efficiency of overall compliance efforts.
Develop a Central Source of Truth for Corporate Records
Having immediate access to corporate records is critical for any compliance work and is one of the best compliance practices. Unfortunately, yet too many organizations lack effective structure for corporate records, run their entity management on spreadsheets and expose themselves to the risk of manual errors. When coupled with the old practice of running corporate minute books in physical form, such approaches create inefficiencies and make compliance work highly unproductive.
Instead, organizations would benefit from creating a single source of truth for all their corporate records kept in a secure cloud repository, making it immediately accessible to authorized users from any device.
When legal professionals are equipped with such technology, they can reap multiple benefits for the whole organization, which include:
- updating corporate records in real time,
- improving collaboration across the organization,
- cutting human error due to pre-defined format for data and various checks,
- ensuring consistency of data and increasing efficiency by leveraging automation tools and auto-populated templates.
Establish Effective Compliance Processes
Effective compliance is impossible with old practices relying on manual processes, siloed approach to compliance and keeping documentation in physical form. As companies spread their structures across jurisdictions and geographies, they need effective technology to meet new challenges and streamline their efforts.
When organizations automate their filings with entity management software and switch to virtual minute books and eSignature, they significantly cut the time needed for corporate housekeeping and getting approvals. By moving their compliance work to entity management software, companies avoid duplicate tasks, which are responsible for the most time waste and manual errors in the organization.
Audit and Monitor for Compliance
Auditing for compliance is always the first step in developing a sound compliance strategy. You need to know where you are with your compliance efforts and how effective your compliance work is.
When you assess your compliance status, having a bird's-eye view of your organization is essential to identify risks and develop a compliance roadmap. Your compliance team needs to have complete information about each legal entity, its subsidiaries and parents, ownership relationships, jurisdictions and tax structures and all other details to include them in the overall compliance effort.
Tech-savvy legal teams can achieve this by leveraging charting capabilities available with entity management software like Athennian, enabling legal professionals to automate the charting process and have an instant view of any part of the business.
Companies that leverage legal technology can also benefit by setting up important reminders to meet deadlines and improve accountability. When the company has a single platform to store its corporate data, all participants can collaborate most effectively and stay in the loop for compliance work.
Make Full Use of Technology
Today, effective compliance is impossible without full application of digital technology. A half-hearted approach of relying on old methods while using random digital tools can only lead to even more confusion, duplicate work and missed deadlines.
Those organizations who are interested in bringing their compliance work to a new level should seriously consider switching to automation tools and entity management software. By doing so, companies can boost the efficiency of their legal teams, avoid omissions, cut human error and improve collaboration.
When the number of legal entities grows exponentially, organizations need to have an effective system in place from day one to keep track of all their data. In particular, companies can benefit from integrating entity management software into their compliance processes by:
- automating compliance processes and workflow,
- ensuring timely filings and high-quality compliance work,
- excluding duplicate work, inefficiencies and human error,
- creating synergies across the organization.
Contact Athennian For More Information
The era of modern compliance has already begun, and you don't want to have your organization left behind by sticking to inefficient legacy approaches. For more information about how legal technology and entity management software can improve your organization's compliance, please don't hesitate to request a custom demo with an entity management expert.