Global Entity Management & Compliance Best Practices

Global Entity Management & Compliance Best Practices

Global Entity Management & Compliance Best Practices

Global entity management is an important part of any corporate secretary or paralegal’s job. It can be costly, time-consuming, and overwhelming if you are not using the best strategies and tools to organize everything you need to track and make it available to the appropriate people.

Wolters Kluwer lists four basic responsibilities of entity management:

  • Staying up-to-date on the fiduciary, regulatory and statutory responsibilities of a business entity and its directors, officers, managers and partners

  • Advising the board, management, and committees on these corporate governance matters

  • Actively maintaining and managing the corporate record to support all transactions, filings, reports, and audits to fulfill these responsibilities

  • Providing secure access to the corporate record to support both internal business needs and external requirements

Getting Started with Global Entity Management & Compliance

Start by collecting all of the company’s essential paperwork in one place. That includes “Articles of Incorporation, Bylaws, meeting minutes, stock certificate ledger, stock certificates, stock certificate stubs, and stock transfer documents,” according to AllBusiness.com.

As that information is updated, people in different departments may need to be able to add and edit documents. The tricky part is to limit those documents to the specific people who need to be able to change them and not allow others to edit or even access them. With Boardbookit board portal software, three levels of admins allow organizations to improve efficiency while controlling how much information administrators of BoardBookit can view.

Separate the data into categories of which groups of people need to access them and for what purposes. The most critical purpose to be mindful of is compliance.

Establishing a Governance & Compliance Program

“A corporate compliance program is generally defined as a formal program specifying an organization’s policies, procedures, and actions within a process to help prevent and detect violations of laws and regulations,” explains Corporate Compliance Insights. “It goes beyond a corporate code-of-conduct since it is an operational program, not simply a code of expected ethical behavior.”

The compliance department focuses on preventing violations of external laws and regulations, as well as maintaining the company’s internal standards, in an effort to protect the company and help it avoid being harmed by waste, fraud, and abuse. Compliance officers need to be able to access records when reporting to regulatory bodies, whether they are governmental or industry-specific, and when reporting internally on policies and procedures. Consequences for not staying in compliance can range from small fines and sanctions up to imprisonment, but a well-maintained corporate compliance program will be a key defense if your company has legal issues.

Compliance for Multinational Corporations

Compliance is more complicated for multinational corporations that are doing business in multiple states with varying regulations, particularly since regulators became more aggressive following the 2008 financial crisis.

“Thorough country research and use of local legal and payroll experts is an essential aspect of preventing non-compliance,” writes global employment organization Shield Geo. “Each country has very specific laws and limitations on employment, immigration and taxation that must be understood prior to entering the new market. Reliance on host country legal or employment resources may be the only way to fully ensure that all requirements are known ahead of time.”

For multinational corporations it may make sense to categorize records by which country requires them. Make sure it’s obvious to those who handle your data, both in the host country and in the home country, how it is organized and whether they may need to update records for more than one country.

Secure Access to Entity Information

The compliance department works closely with the governance department, which partners with it to minimize the company’s risk level. The governance department implements company leaders’ plans for policies and structures, and it tries to head off future risks.

Other groups who need to independently access parts of the data you oversee are senior management and the board of directors. These leaders are responsible to model high standards and integrity in the workplace, to promote those standards to everyone else, and to make sure they address any issues swiftly.

Members of your management team will need to access and edit documents related to daily business activities, the overall structure of the organization and any changes to it, and internal procedures and reviews. They may need to be involved in coordinating reports from multiple departments.

The board of directors needs access to documents to understand how the compliance program is running and when there is a potential compliance violation, and it should be empowered to address issues before they become bigger problems. In addition, the board generates its own data, such as meeting minutes, that need to be available for members and for others who need to review and implement the board’s decisions.

Keeping Entity Management & Compliance a Priority

With so many people requiring access to a wide variety of detailed information in one place, it often makes sense to get outside help with global entity management. Existing systems can develop calendars to remind you when reports are due, offer ways to communicate to different departments at once, and cut down on duplicating efforts across multiple departments. They can make the tedious but critical work required in global entity management and compliance more efficient and more cost effective.

When you look for board portal software that will help you track your data, look for a system that is secure, flexible, user-friendly, and convenient. Keep in mind the needs of the different constituencies who will use the software. Your IT professionals should test it to make sure it is exceptionally secure. You will want a state of the art environment with dedicated servers, back up sites, and data retention features.

When shopping for a solution also make sure you look at the cost savings of of using a board portal versus paper, or another more complex software solution. Global entity management is important for every corporate secretary, but it does not have to always be costly and time-consuming. By using a board portal solution such as BoardBookit, you can save both time and money.

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2018-05-02T19:20:37-04:00