How Effective Is Your Entity Management Strategy? Find Out Now

If you’ve got the basics of entity management from part 1 of this blog series down, then it’s time to take a deeper dive into your entity management strategy. At this point, you should start asking yourself some critical questions: Are you fully leveraging the best practices recommended by industry experts? Are you using the most effective entity management software available to streamline your processes and improve efficiency?

In part 2, you’ll find:

• A valuable resource to assess your entity management maturity
• 7 entity management best practices
• How to simplify your entity management strategy
• How to use software for legal entity management

Evaluate your entity management strategy

While entity management is complex, time-consuming, and filled with risks, top legal professionals have elevated their entity management strategy from a reactive task to an advantageous activity, all through an entity management maturity curve. This curve, made of four crucial stages, serves as a useful map of an organisation’s entity management. The stages include:

1. Developing: basic, reactive entity management strategy, with siloed data and limited visibility
2. Stabilised: centralised entity management strategy with a single source of truth
3. Maturing: insightful, integrated entity management strategy that uses technology as an advantage
4. Optimised: proactive, automated entity management strategy with continuous reporting

To learn more about this model and bring your organisation from developing to optimised, read our book on the Entity Management Maturity Curve.

7 entity management best practices

Efficient and effective entity management strategies save time, avoid mistakes and make it easier for your entities to achieve their business goals. If you aren’t up-to-date on entity management tools and best practices, your competition could pull ahead in this ever-evolving, complex global economy.

With that in mind, we offer five essential entity management strategies to incorporate into your governance operations:

1. Centralise compliance, regulatory filings and record-keeping: Missing regulatory filing deadlines, ignoring compliance and sloppy record-keeping, at best, will slow your business growth and, at worst, can threaten the health and future of your business. Centralising this data can ensure that stakeholders know what needs to be done and when and have the tools to execute their business functions.
2. Adopt robust governance practices: Rigorous governance practices can help corporations keep up with entity management. Scheduling and documenting meetings consistently, ensuring compliance with local laws, and keeping transparent records are all hallmarks of good governance, and they are the same processes that will hold up to regulatory scrutiny in most countries.
3. Support directors in their responsibilities: To stay competitive, your directors must possess appropriate expertise and skills and avoid conflicts of interest. Entities must ensure they comply with director independence regulations and restrictions on the number of directorships. Directors benefit from ongoing training about their responsibilities, potential conflicts of interest and governance tasks. Secure, ongoing and appropriate communication among directors, employees and shareholders is essential for directors to fulfil their ongoing responsibilities.
4. Create a framework: Superior entity management doesn’t happen by accident. Your organisation must construct a workable framework and make it the cornerstone of your entity management strategy for all your users so they can access the information they need. That also means that users are authorised to access information essential for their function but not information outside of this. An effective framework must start at the top. Key stakeholders, including board members and corporate secretaries, must buy into the process and the system.
5. Prioritise data accuracy and security: Entity management is incomplete without data. Different countries also have different standards for data protection. Periodically auditing entity data to identify discrepancies and ensure accuracy promotes data integrity. This enables boards to make strategic decisions with the right information.
6. Empower the corporate secretary: The corporate secretary plays a central role in corporate management, governance and compliance. Organisations that empower their secretaries to act proactively can stay ahead of the curve.
7. Leverage technology for compliance: Technology can bring order to your entity management processes. It’s best to choose a solution that easily integrates with your existing systems and stays current as compliance and regulatory requirements evolve.

Simplify your entity management strategy

While there may be tips and tricks, like implementing the best practices, a good entity management strategy boils down to one key variable: the right solution for your legal teams. Let’s face it, in order to keep pace with the rapid changes in business, your M&A and legal teams can not be hindered by manual processes.

Additionally, you must stay ahead of regulatory scrutiny by keeping up with the latest regulations and jurisdictional requirements – some of which were outlined in part 1 of this series. Simply put, even the best legal teams need the right tools. The right entity management software can assist you with the challenges of entity management and much more.

To find the right tools for your entity management strategy, download the ebook, A Buyer’s Guide to Entity Management Software.

Leveraging software for legal entity management

Technology plays a pivotal role in streamlining entity management. Many common entity management challenges are baked into these software solutions, allowing corporations to get instant entity oversight from a single governance platform.

Legal entity management software can:

• Simplify compliance tracking: Corporate secretaries have the increasingly complicated job of tracking compliance deadlines across multiple jurisdictions. The more jurisdictions they manage, the easier it is to miss filings and penalties. Software automates tracking with centralised dashboards, reminders and alerts, ensuring timely filing.
• Streamline record keeping: Corporate records proliferate quickly, especially when corporations span the globe. The sheer volume of corporate documents, resolutions and board materials makes record-keeping both time-consuming and resource-intensive. By centralising these documents and automating their storage and creation, legal entity management software simplifies the process and cuts the costs associated with it.
• Protect the organisation legally: General counsels need timely and reliable information to ensure the company operates legally. This information is difficult to provide if critical documents are incomplete, inaccurate or difficult to access. Legal entity management platforms provide a secure, centralised repository for vital documents, such as statutory registers, contracts and governance documents.
• Provide global entity oversight: The C-suite and the board need real-time visibility into global entity status and compliance risk to make the best decisions for the organisations. However, scattered records and data can quickly create strategic blind spots. Analytics and reporting tools within entity management software offer high-level overviews of critical metrics, supporting better decision-making.
• Keep up with global tax systems: An organisation’s tax function is essential to operating compliantly in any jurisdiction. However, tax heads too often struggle to manage the distinct tax systems in new jurisdictions and provide compliant and timely tax returns and other filings for each. The best entity management software helps tax heads visualise the company structure, quickly identify tax implications and stay on top of filing requirements.

Turn entity management into a standard business practice

Transforming your entity management strategy is no easy feat – but knowing where to start is the first step. The importance of the right tools cannot be overstated either. Turn your entity management around by leveraging technology – find out more here.