Effective entity governance - the process of ensuring your legal entities are managed in compliance with relevant legislation and regulations - is vital for any organization consisting of numerous subsidiaries or entities. As your business matures, it's likely to operate across a number of entities, covering a range of regions and, potentially, jurisdictions. Robust entity management should form an integral part of your corporate governance program: essential to mitigate the risks these subsidiaries can pose. The general counsel (GC) and legal operations team play a key role here, capitalizing on their deep insight into risk management gained via their management of multiple entities and role maintaining compliance across multiple jurisdictions. They are traditional ''keepers of the corporate record'' and as such, uniquely positioned to act as strategic advisors to the business on entity governance. Making an investment in entity governance isn't a nice-to-do; it's a non-negotiable aspect of your approach to compliance. The good news is that, while effective legal entity governance isn't without its challenges, there is a clear roadmap to success. Our 4 Steps to More Effective Entity Governance set out a clear action plan for any general counsel or legal operations team aiming to improve governance across their subsidiaries.

Step 1 - Create A Single Source of Truth

Whether you're identifying potential risks or looking to capitalize on available opportunities, if all departments are drawing from the same data source, you will be empowered to respond more quickly. Accurate legal entity data is a pre-requisite to compliance, with a lack of trust in data identified as one of the four fundamental challenges to a successful entity governance strategy. You need to be confident that you have easy access to up-to-date, comprehensive information on entity locations, licenses and other corporate data. Do you have accurate records on your directors and officers? Does your current reporting give you a clear picture of where each of your entities fits within your overall corporate structure? Security, like accuracy, is a key consideration when creating a single source of truth for your entity data. Best practice entity data management demands secure file-sharing, and robust sign on and authentication protocols that make access easy for authorized users while keeping out unwanted visitors. The best data solutions will provide a full audit trail and deliver accurate, timely and user-friendly reporting, giving a clear view of entity data that supports rigorous governance.

Step 2 - Unite Business Units Around the Centralized Record

Your chosen entity management solution should enable data collection, visibility, oversight and collaboration across your entire enterprise. Effective legal entity data management software will allow you to manage changes to data - for example, when onboarding new acquisitions, dissolving companies or making other corporate structural changes. ''Know your customer'' information requests are made faster and simpler via shared access to entity information. Collaboration across business units, and immediate insight into Power of Attorney rights, make approving and executing decisions quicker and easier. Dependencies like bank details and relevant dates are easily shared with all the departments - like treasury and tax - who need them. Clear and centrally-accessed structure charts allow all relevant parties to see and document all hierarchies, dependencies and efficiencies. To supplement your own data, the best entity management systems will also import information from external parties such as Google Maps, CSC and Workday, giving you the full picture.

Step 3 - Make Entity Information Easy to Find

There's no point having impeccable data integrity if access isn't user-friendly. Look for a system that offers self-service in order to deliver operational efficiency and empower teams to manage their own information. Choosing the right entity management software means checking that user permissions will deliver on your requirements. You need to restrict access to confidential information, while making it easily-found by those who need it. When files need to be shared, this should be highly secure. A good solution will make reporting and data-sharing painless, enabling you to create clear dashboards that you can share with internal departments and external parties - regulators and external counsel, for instance. And with reporting customizable, you can easily share information in the formats that all stakeholders, departments and jurisdictions prefer.

Step 4 - Let Automation Do the Work for You

In all aspects of legal entity governance, automation can relieve general counsels of the ''heavy lifting'' - and as a result, making your role more efficient and strategic, increasing the value you deliver to the board and the organization overall. Automation reduces the burden of entity lifecycle management, making it easier to stay on top of your corporate structures, policies and filings, and managing any divestments, dissolutions or acquisitions. Where changes are needed, automated workflows can inform regional data owners to reduce the risk of omissions. Electronic signatures keep important deals and filings moving toward their ultimate destination. Reports can be produced quickly and easily, customized to meet your organization's needs and enabling informed decision-making based on comprehensive, accurate data. Professional and user-friendly automated reporting keeps all your stakeholders in the picture on governance performance. Regulatory compliance is made more robust, with electronic filing enabling all relevant parties to keep abreast of regulatory requirements and automatic calendar reminders ensuring no deadlines are missed.

Diligent Entities - Supporting Entity Governance at Every Step

Entities, Diligent's entity management software, provides the foundation for flawless entity governance. It enables you to create a single source of truth, by consolidating your files and folders into a unified view, as well as integrating seamlessly with third-party systems. Its standardized templates and reports can be customized to fit your organization's structure and needs, mandating your most crucial data. It unites people, processes and information, providing highly-secure yet accessible data libraries, increasingly compliance rigor via in-built compliance calendar reminders and creating dynamic corporate structure data that offer clear oversight of the entire organization. Entities facilitates self-service and drives efficiency; secure file-sharing and two-factor authentication give assurance, while those with permission have streamlined access to the documents they need. Clear dashboards and customizable reporting give users and stakeholders comprehensive, timely reporting. You can read more about Entities, and request a demo to see how it could support you on your roadmap to entity governance, on our website.