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How entity management systems are transforming in-house operations
In a recent article for Legal Brief, Kariem Abdellatif, Head of Mercator® by Citco, discusses how technology can ensure that lawyers have the right tools for the job and how entity management systems are transforming the way in-house teams at multinational companies operate.
The pandemic has not only impacted personal lives over the past two years, but has also caused significant disruption in the professional domain. The various lockdowns and remote-working measures have wreaked havoc on previously accepted ways of operating, and while there have certainly been some benefits, it has been a steep learning curve for some sectors.
This uncertainty has been keenly felt in the legal sector and particularly among those whose roles concern global entity portfolio management. Even before the pandemic, an increasingly complex regulatory environment and the importance of demonstrating best practice to internal stakeholders were already keeping general counsels and legal teams busy, so the Covid curveball has complicated matters even further. Compliance with global regulations is not just a case of avoiding censure and protecting a company’s reputation, but also demonstrating how this best practice can enhance the overall competitiveness of a business.
The start of the year is always a hectic time in the calendar when general counsels and their corporate secretarial groups are preparing to complete annual filings in time. This frenzy is intensified if the organisation is global in nature, which adds different time zones and languages to the mix, as well as a spread of responsibilities and service providers across jurisdictions.
Making life easier
Technology has a significant role to play assisting teams focused on regulatory and legal matters. While the trend towards digitalisation was already underway, the pandemic has undoubtedly accelerated the speed of this transition. The last Mercator Entity Management Report concluded that Singapore was the top regulatory base for multinationals. It is also not surprising that the city state is at the pioneering end of the scale in terms of its adoption of technology and the use of electronic filing systems and signatures.
Singapore, however, is not alone in its forward-looking perspective. Many other countries have embraced online notarisations since the start of the pandemic, with virtual meetings of boards and shareholders becoming increasingly commonplace. Argentina, Belgium and the Netherlands are further examples of innovative jurisdictions putting practicality above bureaucracy.
There are multiple ways that technology can help equip lawyers – especially those concerned with entity management on an international basis – with the tools to do their job more effectively. Such is the wealth of options at one’s disposal, perhaps the most important element of harnessing technology effectively is to not use too many technology platforms and risk overwhelming individuals and teams with the variety of processes required.
If you start to tot up the systems used between document management, regulatory updates, invoices and filings; you soon run out of fingers to count on. In that sense, too much technology can be as unhelpful as too little.
This is why centralised platforms can represent a clearer way forward. This is of elevated importance where companies operate globally and therefore not only have more regulatory requirements, workflows and reporting to take care of, but also the increased likelihood of entities in those jurisdictions using their own platforms. Using a single technology system helps drive consistency across all these portfolios and reduces the risk of operational overload from trying to navigate multiple, conflicting platforms.
It is nigh on impossible to foresee acts of God, but forward looking compliance calendars in such a single system can help account for events that are expected, such as upcoming changes in deadlines. Giving all members of an international team oversight of recurring obligations as well as event-driven tasks, reduces the risk of plans being interrupted at the last minute.
Data matters
While the catch-all term ‘technology’ conjures up various images, what it often boils down to for in-house counsels and corporate secretarial teams is access to data that helps inform decision making. Greater tech adoption leads to more readily available data which, in turn, can provide an accurate, comprehensive and objective picture of the global governance landscape and a company’s position within that.
It is also important not to confuse technology with automation in this instance and effective systems have to be operated and supported by effective teams. This means strong operational delivery capabilities with clearly defined responsibilities between internal stakeholders and service providers. What technology helps foster in such situations is a transparency across an organisation about the overall obligations and who is responsible for achieving these.
This article was originally published by Legal Brief – available here.