First published in the November 2021 issue of Governance
The world’s governance and entity management landscape is changing fast, according to global financial service institution and corporate governance organisation Computershare.
A recent Government consultation designed to restore trust in corporate governance recommended new measures to increase the accountability of directors and improve audits of large companies. Remote working, which enabled many companies to ‘keep the lights on’ during the pandemic, has also brought challenges around managing subsidiary entities and other regular governance responsibilities.
At a virtual subsidiary governance event organised by ICSA: The Chartered Governance Institute, Computershare asked companies about the factors that concerned them most about managing subsidiaries. UK firms said remote working and business continuity was their top concern (33%), followed by governance standards and practices (27%), with worries about transparency on local regulations, compliance status and levels of risk and cost in third place (20%).
Additionally, Computershare clients at a US event said that maintaining, sourcing and providing subsidiary information efficiently was their top concern (34%), followed by transparency on local regulations, compliance status and levels of risk and cost (26%). The third highest concern was keeping on top of group restructures and M&A transactions (17%).
Jazz Dhoofer, Director of Technology Optimisation at Computershare Governance Services, said: “Global entity management and governance is getting more complex, especially during the pandemic, exposing operational deficiencies and highlighting the importance of technology. “During the pandemic, employees have spent more time working from home, making conventional ways of working and collaboration between teams more difficult or impossible, potentially leading to issues with data access or integrity and increased time spent on processes. “Technology can help companies gain full oversight of entity governance, compliance and transactions-related activity by automating approvals, audit trails and formal documents such as attestations, among others. “Systematic management of data and processes can, in turn, protect data accuracy, improve business continuity and efficiency as well as reduce risk, save time and provide powerful insights for management.”
He added that even companies already working on streamlining business workflows may not fully optimise, or simply might not know enough about how to use technology to its fullest to best support legal entity activities.
Below are three key principles from Computershare to enable companies to incorporate technology into their governance management and entity compliance approach.
1. Operate a ‘single version of truth’ by controlling data and securing its integrity
Operating an enterprise-wide platform eradicates duplication, lessens the chances of errors or bottlenecks, and encourages cross-unit collaboration. Personalising interfaces and increasing self service provides secure and efficient access to data for internal businesses and stakeholders by, for example, enabling directors to see appointment and entity information. Focusing on data processes and controls also helps companies to meet digitisation targets.
2. Manage workflows more efficiently to save time and reduce risk
Entity activities such as changing directors can involve companies producing, signing and filing documents, as well as tracking and recording information in spreadsheets or files.
Document automation, automated workflows, e-filing and e-signature technology remove manual steps and enable workers to concentrate on higher-value tasks. Automated workflows reduce the potential for human error and data loss. They also provide visible, reportable and auditable processes.
Many companies may benefit from asking their software providers how to better integrate existing systems and use automation to save resources.
3. Use data intelligently to deliver and demonstrate organisational value
Automating data analytics provides meaningful intelligence and insights efficiently to aid management, reporting and decision making. It can provide a way to measure how effective entity compliance, data management and governance systems are as well as illustrate resourcing needs, highlight training requirements, opportunities for efficiencies, reducing cost and risk.
Using technology to illustrate data in a clear, compelling way can also show a keen understanding of a business’s overarching needs and value delivered.
In conclusion, while technology enables companies to deliver a variety of benefits to help meet the entity management and governance challenges of today, most are still to harness its full potential.
Other key answers from poll questions at the events revealed:
|Concern||Proportion/Details||Global (%)||UK Poll (%)||USA Poll (%)|
|Estimated time companies waste on: operating manual processes, obtaining/validating corporate information, tracking status of global entity management activities||Up to 20%||44||53||40|
|Extent companies are fully optimising the use and functionality of legal entity management systems/databases||Basic use for corporate data only||28||11||36|
|Some optimisation beyond basic use but not enough||40||43||36|
|Fully using available features and maximising use across business functions/stakeholders||9||14||5|
To learn more about how Computershare can assist, contact