Top 5 Takeaways: ACC Hong Kong Webinar ‘Stability and Consistency in GEPM’
Mercator by Citco (Mercator™) has identified a number of key factors for legal departments to focus on in order to maintain stability and consistency when it comes to their Global Entity Portfolio Management (GEPM).
Speaking at an event hosted by the Association of Corporate Counsel’s Hong-Kong chapter, Kariem Abdellatif, Head of Mercator by Citco and Chris Butler, Head of Operations of Mercator by Citco highlighted what best practice looks like in terms of the implementation, usage and connectivity of digital tools in GEPM.
The duo also highlighted the corporate governance trends and challenges observed in APAC, walking members through the technology essentials for legal departments.
Featuring data from the inaugural Mercator Entity Management Report, below Kariem and Chris highlighted five top takeaways:
1. The pressure is on
The COVID-19 pandemic caused significant disruption to the way businesses operate, with the effects as far reaching as any event in modern history. For those working in GEPM these were felt with added intensity given the profession’s global nature, paired with an increasingly complex regulatory environment (not to mention the ongoing challenges in demonstrating efficiencies and best practice to internal stakeholders).
Compliance with global regulations remains high up the agenda for boards, especially as the consequences of non-compliance include fines and reputational fall-out. Perhaps more so than ever before, in-house teams must therefore be able to demonstrate that their GEPM best practice enhances competitiveness, demonstrates efficiencies and mitigates risk.
The pressure is on for in-house counsels and legal teams to continue to innovate with regards to their governance processes, and communicate with transparency to all stakeholders.
2. Digitalization is the permanent global reality
Findings from Mercator’s Entity Management Report 2021 saw Singapore named the top regulatory base for multinationals – this is largely down to the government’s response to the pandemic and adoption of technology, enabling electronic filings systems and e-signatures across the board.
No doubt the trend for digitalization in GEPM existed before the pandemic, but as remote working became part of the new normal across the globe, it is clear this has rocketed. Once somewhat of a novelty, over 20 countries have put in place online notarizations since the pandemic, with e-meetings of shareholders and boards also continuing to gain traction; Argentina, Belgium and The Netherlands are key examples of the innovate jurisdictions that introduced new legislation allowing e-meetings, regardless of what a company’s bylaws indicate.
In short, digitalization is transforming GEPM, highlighting why an external entity management system with instant online access to information, and service delivery, could be necessary.
3. The right tools for the job
With such rapid digitalization, it can often be overwhelming for in-house teams to keep track of which technology platform does what. Indeed, many multinational HQ’s and their entities will end up interacting with their service providers via multiple different technology systems, be it for document management, regulatory updates or invoices and filings.
What is needed is as close to a centralized platform as possible – a single technology system for entities in order to help drive consistency across portfolios. In response to this need, we developed Entica™.
Covering over 160 jurisdictions via its unique Single Point of Delivery modus operandi, Mercator’s Entica platform is a custom designed technology platform providing users with oversight and control over global entities. Entica links HQ’s with their Mercator client service teams, and gives them instant access to insights about their entities, their compliance status, and upcoming requirements, as well as workflows and global and detailed reporting capabilities.
4. It all comes back to data
Historically, for in-house counsels and corporate secretarial teams, there existed significant obstacles in accessing data to frame and support portfolio-wide decision making. This lack of data also made it difficult to provide a truly accurate comprehensive and objective picture of the global governance landscape.
But with greater tech adoption comes more readily available data, and this is increasingly being leveraged to help steer GEPM strategy and decisions.
Likewise, for the first time, technological developments are further enhancing the use of data. For example, we have been able to use Entica’s comprehensive data set to provide a direct insight into the practice and dynamics of GEPM. In the inaugural Mercator Entity Management Report 2021 we saw a correlation between the duration of activities and the corresponding pricing per region, most clearly demonstrated by APAC which has both the shortest average duration and the lowest overall per activity price. Further insights from can be found by downloading the full report here.
5. You matter
Ultimately, what you do in GEPM matters. Against a background in which Governance and Regulatory Compliance Standards continue to evolve and increase, technological innovation is accelerating. This allows new insights to help guide your company secretarial strategy and decisions.
At Mercator, our philosophy is that GEPM is a discipline in its own right. It is a specialist field and needs a specialist service. Working with a business that understands this and treats it in this way is crucial.