Running a business is a complex undertaking, and among these complexities are tasks that all commercial enterprises have in common. Regardless of the size of your business, the industry in which it operates, or the length of time it has been up and running – you and your competitors must all deal with corporate governance housekeeping.
It is this basic fact that makes corporate governance housekeeping more than just the everyday, run-of-the-mill chore that is required of business management. Rather, it is another opportunity to gain the edge on those that are also vying for customers in your field. Indeed, when you take greater control of your corporate governance housekeeping by simplifying the processes involved, you are better able to take the lead in profitability, and gain market share.
What is corporate governance?
When a business is incorporated, it becomes its own legal entity and its interests, operation, and functions are therefore considered separate from the person or people that created it. This means that, in the course of business, the creators of the organisation enjoy some protection in terms of liability, but it also brings with it the responsibility to perform the procedures and processes that are required by law, and which the entity of the business cannot perform for itself.
Corporate governance is the structure that determines these decision-making rights and responsibilities with regard to the business entity. It sets out the position of each stakeholder in terms of their relationship to the business. The stakeholders of a business will include managers, Directors, shareholders, regulators, creditors, and auditors. If an individual or organisation has played a role in the creation of a business, or in its continued operation, the stakeholder title may apply.
A large proportion of corporate governance can be characterised as relationship management, as its goal is to mitigate and avoid, where possible, conflicts of interest between different stakeholders. When conflicts of interest arise, the progress and success of the organisation as a whole is impacted. When relationships between stakeholders are more effectively managed, with transparency and open communication, then the organisation moves as a single, cohesive unit, and greater profitability is more easily achieved.
The relationships between stakeholders are not only those between shareholders and managers. They include staff, as well as the governments of the territories in which the business operates. This is the range of stakeholders to whom the business management and Directors are accountable, and to whom financial reporting is required.
What is Corporate Governance Housekeeping?
So, if corporate governance is the management of relationships between stakeholders, then corporate governance housekeeping is the processes and procedures that make such management possible. These procedures and processes include:
- Maintenance of licenses
- Financial reporting
- Shareholder meetings
- Board of Directors meetings
- Management of voting rights
- Management of subsidiaries
Clearly, the larger the business, the more complex the task of corporate governance housekeeping becomes. If a business has a large number of subsidiaries, or operates in more than one territory, for example, then the number of reporting responsibilities increases, along with the number of relationships to be managed. This is because relationships in corporate governance are managed according to regulatory compliance – and these vary from country to country.
Simplifying corporate governance with Legal Entity Management Software
Working to simplify your corporate governance housekeeping – that is, the administrative tasks involved in managing the relationships between stakeholders – is vital for increased efficiency in your business. While this is true of all organisations, regardless of size, it is even more important for those businesses with extensive organisational structures, and those operating in multiple territories. Increased efficiency leads to increased profitability, and this is how a competitive edge is gained in the marketplace. For this reason, the area of corporate governance housekeeping must always be considered alongside other business areas in terms of efficiency measures.
Legal Entity Management Software increases the efficiency of your corporate governance housekeeping through a process of streamlining. This cloud-based platform delivers a central repository; a library of all corporate governance data and documentation. Bringing all legal entity information together in this way allows for vital functions to be performed in a fraction of the time, using far less staff time and resources.
- Better resource deployment, leading to financial savings
With automated functions, notifications, and alerts, Legal Entity Management Software reduces the amount of time required for personnel to spend on corporate governance housekeeping tasks. Administration is streamlined with full digitisation of documentation, and timescales are shortened by instant permission-based access to a central repository. In addition, creating a central repository that is both paperless and located in cloud-based storage reduces the need for physical space within the business premises. This, in turn, speeds the progress of your business toward carbon neutrality, and creates significant financial savings in terms of capital expenses.
- Closer monitoring and oversight
When historically your corporate governance housekeeping has involved printed copies of Shareholder and Board of Directors meetings, and the manual tracking of voting rights and share value through spreadsheets and ledgers, the process inevitably becomes unmanageable over time. This can lead to missed deadlines for financial reporting which, in turn, can lead to financial and even criminal sanctions levied by government agencies. Legal Entity Management Software enables the closer monitoring of timescales and schedules, with responsibilities and task assignments made clear, and with customisable notifications and alerts for milestone events.
- Faster distribution of information
Web-based access to a central repository, combined with a high degree of automation, means that Legal Entity Management Software enables the faster distribution of information. Minutes of meetings, Shareholder reports, tax returns, annual accounts – all documentation that needs to be disseminated for recording purposes, or for signature, can be moved through the organisation and accessed by authorised personnel instantly.
- Full transparency and accountability
Effective corporate governance hinges on accountability, and Legal Entity Management Software ensures that all actions are recorded, reportable, and auditable. This, along with the central repository design, means that full transparency is maintained at all times. These features of the Legal Entity Management Software package enable your business to demonstrate full compliance with internal governance, as well as with the regulatory requirements of each of the territories in which you operate. Automated audit trails mean that evidence of your compliance is always readily available, and incidents of non-compliance are instantly reported for immediate leadership action.
- Accurate data analysis
The customisable reporting feature of Legal Entity Management Software means that accurate data analysis is available at all times. This is a vital part of gaining a competitive edge in the marketplace, as it provides the opportunity to not only maintain oversight of your organisational structure, but to pinpoint the precise areas that are not operating at the optimal level. Customised reporting can be used to highlight bottlenecks in workflows, and underlying sticking points in stakeholder relationships. This provision of actionable data is the most important tool in gaining efficiency of processes and procedures, because it empowers business management to make the positive changes that will have the clearest, most significant impact.
The customisable nature of Legal Entity Management Software means that data protection requirements and obligations can also be met with ease. A fully configurable access control interface allows authorised personnel to restrict access to sensitive information. This protects, not only the private data of stakeholders, but also commercially sensitive intellectual property found within the corporate governance level of your organisational structure. Moreover, cutting edge data encryption techniques add a further layer of security to your business information.
Getting ahead of the competition
With technological development bringing new opportunities to all kinds of business, it has never been more important to strive for agility and leanness in your commercial operations. These are the operational characteristics that will contribute most significantly to getting ahead of the competition, because they will enable your business to adapt easily to both future technological advancements, and global economic shifts.
To turn your business model into one that is adaptable and flexible, your operation must be streamlined and efficient. Unproductive processes must be removed and replaced with systems that are better organised, and which allow for resources to be better deployed. Legal Entity Management Software packages, such as Symfact, achieve exactly that. When used as part of wholescale streamlining efforts, this cloud-based, centralised management suite can give you exactly the edge that you need to lead your field, and pull ahead of your closest competition.
In this way, Legal Entity Management Software not only helps you manage the relationships between stakeholders, it also helps you manage your relationship with your competitors, and with the market in which you are operating. Gaining tighter control and oversight of your corporate governance housekeeping brings focus to your entire organisation by mitigating conflict of interest and ensuring that all involved are working in concert with the values and mission statement of the corporation. Doing so in a way that is efficient, and allows for staff time to be better deployed results in healthier returns on investment and, ultimately, sustainable commercial success.