The business world is rapidly evolving. For general counsel, staying on top of regulatory, legislative, and political developments that affect the operations of their entities around the world can be challenging. Unpredictable events like the COVID-19 pandemic can further complicate their responsibilities.
In the past, many companies viewed their general counsel as a technical specialist, to be consulted on legal matters only. Today, their role has expanded beyond providing legal advice, managing risk, and ensuring an entity’s legal compliance. They are also leaned on to support new strategies and provide direction on new business solutions. In response to increasing demands and responsibilities, general counsel often need to place more resources into monitoring and coordination of business actions.
In this article we explore five ways in which general counsel can address these challenges and provide efficiencies in the management of their entities around the world.
Staying ahead of regulatory and compliance risks
Undoubtedly, one of the biggest challenges general counsel face is the growing compliance obligations required by regulators across different service sectors, markets, and jurisdictions.
New laws governing fraud, money laundering, tax management, intellectual property and governance, among others, make it difficult for general counsel to keep up in all areas that a company does business. On top of all this, as a company transacts business globally, there are many different business practices, cultural considerations, sensitivities, and perceptions at play alongside stringent foreign laws and rules that are not always clearly defined or consistently enforced.
More and more general counsel seek the support of a strategic partner across each country and jurisdiction where their entities operate to help drive greater understanding of the regulatory, political, and cultural environments at play. In addition to working with an experienced global provider, they benefit from implementing a robust system that ensures the streamlined delivery of legal updates from each jurisdiction so that any changes relevant to their entities can be applied promptly.
Ensuring effective governance structures
As business leaders and board members are held more accountable for compliance offenses, ensuring an effective governance structure is increasing in importance. Today’s general counsel ensures that good governance is practiced at all levels, including within subsidiaries and third-party vendors. They also establish a communication strategy to keep their directors and board members informed of ongoing fiduciary duties and updates to compliance obligations.
The general counsel must also make it a habit to report on events affecting the governance and/or ownership structures in both the local entity and the parent company; such as in a restructuring process due to mergers and acquisitions, changes in ultimate beneficial owners (UBOs), etc.
They are often responsible for leading reviews of structure and entity rationalization projects to ensure the company continues to operate efficiently across all jurisdictions, deciding on the most appropriate entity type for each operation. This ensures that there is no overlap and that compliance is maintained locally and internationally. Organizational charting or entity diagramming can help general counsel visualize the entire organizational structure, where they can identify compliance issues and better assess the full complexity of the business as it scales.
Conducting ongoing entity due diligence aided by technology
It’s the responsibility of general counsel to ensure that each entity remains in good standing. Regularly conducting a global entity compliance health check helps identify any unforeseen issues, verify that processes and regulations are adhered to, and ensures that all entities maintain the right status and are compliant in their local jurisdiction.
An important aspect of fulfilling this responsibility is relying on a single source of truth for all entity data. By working with an entity management system that acts as a central repository and is supported by local experts from each jurisdiction in real time, the general counsel can be confident that they can access the latest and most accurate entity data.
Storing entity information, documents, and organizational charts in a highly secure format, enabling the management of the ongoing accuracy of the corporate record using compliance calendars, reminders, and workflows for better data, helps general counsel and their teams to streamline compliance operations.
Proactively seeking operational efficiencies
As regulations become far-reaching, managing legal compliance issues can raise the cost of doing business. This is compounded by the increased complexity of managing multiple entities in multiple countries. Many organizations rely on providers in each jurisdiction, an approach that increases the workload for general counsel and their teams. Ensuring that each provider completes the necessary compliance tasks and managing contracts and invoices from each adds additional administrative work that increases operational costs and time spent.
Doing more with less places pressure on legal departments to leverage different strategies to drive efficiencies. One such way general counsel do this is (1) employing technology solutions that consolidate multi-jurisdictional compliance, and (2) partnering with a knowledgeable global provider that can handle compliance wherever they need it through a single point of contact. This frees up general counsel’s time and resources to focus on more strategic tasks and future requirements.
Adding value through responsiveness and good data
Having access to accurate information fuels general counsel’s ability to deliver measurable value to high-stakes corporate risk management. By adopting an entity management system and other relevant tools that help maintain accessible and current organizational data, general counsel and their teams are better equipped to help meet commercial objectives, identify opportunities for growth, and support their business’ global strategy.
General counsel is a trusted advisor to an organization. Not only do they help it meet its legal compliance obligations, but they also aid the organization in meeting its global objectives. They are looked upon to provide a strong sense of investment opportunities and knowledge of market conditions around the world while anticipating problems and issues down the road. To do this, general counsel need continuous access and understanding of local jurisdictional information.
Similarly, they must ensure their teams can achieve more with less. Legal departments are under pressure to reduce outside spend while improving cost predictability. They need trusted technology solutions that ensure seamless communication, efficient work methods, and 24x7 access to real-time information about their global entities.
The most successful general counsel have an established relationship with a knowledgeable global provider that acts as an extension of their team. One who can work with them to keep their global business running and in good health. CT’s Global Corporate Services helps general counsel simplify the process by consolidating global compliance needs through a single point of contact in the U.S., reducing cost, and managing compliance efficiently and seamlessly wherever they do business. To learn more about how CT can help you better manage your global compliance needs, contact a CT representative at (855) 444-5358 (toll-free U.S.).