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In-house counsels tasked with curbing entity management risks face a multi-faceted problem, having to address an expanding number of challenges within a volatile legal and economic environment. In this scenario, understanding key risk areas and implementing robust risk mitigation strategies backed by effective technology becomes a strategic imperative. Below we discuss major risk areas for compliance and how strategic mitigation approaches backed by legal technology can become a game-changer for in-house counsels navigating the increasingly complex regulatory environment.
As the risk landscape continues to evolve, keeping up with the changes becomes an ongoing challenge. While in-house teams may not keep all emerging risks in the spotlight, identifying and measuring the main ones becomes a key priority for risk management practices.
From an entity management perspective, inaccurate data, non-compliance, and inefficient governance stand among the top risks with the highest value. When materialized, these risks can lead to devastating penalties as well as reputational and financial damage.
When entity management processes fail to maintain accurate and updated records for all legal entities, organizations start to face multiple types of risks beyond compliance. Poorly maintained entities and corporate records compromise an organization's worth and reputation, increase costs of compliance, audits, and due diligence, and decrease the quality of decision-making.
The complexity of the modern regulatory landscape and evolving legislation set a high bar for in-house counsels and other teams. The global tax reform, trend-setting AI legislation in the European Union, and EU Corporate Sustainability Reporting are just a few examples of major developments that push the bar even higher for compliance professionals who need to implement new processes for aligning their organizations with the changes.
Inefficient governance presents a whole host of risks associated with failure to provide for effective oversight, enforce ethical standards and corporate accountability, and mitigate liabilities, among other issues. In addition, with the emergence of regulations similar to the UK Corporate Governance Code, the boards will be expected to fulfill new responsibilities and ensure accountability and transparency in their governance practices.
The increasing regulatory complexity and risks related to entity management call for the application of strategic risk mitigation approaches by in-house legal teams. These approaches should address key areas of risk, such as compliance with existing and emerging legislation, data accuracy, and effective governance, and should bring efficiency into the entity management framework.
Any risk management agenda for mitigating risks of non-compliance should start with assessing the applicability and impact of new regulations. Organizations need to stay ahead of the changes by practicing proactive compliance and fostering industry relations with experts, consultants, and external teams to ensure early enablement.
In entity management, the quality of data and processes is the key for ensuring compliance, and operational efficiency, providing for corporate transparency and risk management. By applying best-of-breed technology such as modern entity management software, in-house counsels can increase the quality of data and transform compliance from regulatory necessity into a competitive advantage.
By identifying and implementing roles and rules, and defining organizations' controls and processes, in-house counsels can achieve adherence to ethical standards, applicable regulations, and policies. By engaging the board, senior management, and other teams in compliance efforts within a broader governance framework, in-house counsels become better equipped to handle emerging risks and empowered to drive change to their organizations.
With entity data management being one of the key components of corporate governance, compliance, and risk management, in-house counsels need to employ the best processes and systems to streamline their efforts. When compliance teams work with entity management software like Athennian, they can effectively address all key risk areas and bring their compliance agenda to a new level of effectiveness.
Facing a constantly increasing volume of data points required for compliance, organizations need to minimize and exclude manual processes, introduce automation, and create automated workflows to empower their teams. By automating routine manual tasks through legal technology, in-house counsels can focus on strategic initiatives, while ensuring accuracy of data and higher quality of compliance work.
Working with Athennian entity management software, the legal teams can bring other strategic advantages into their compliance efforts, including:
In-house counsels handling entity management risks face complex challenges multiplied by the speed of regulatory change and the number of legal entities in their organizations. In this scenario, entity management software becomes a critical tool for ensuring operational efficiency and implementing effective risk management strategies.
Athennian empowers compliance teams with an effective toolset that allows automating manual processes, leveraging corporate records as a key strategic asset, and implementing governance frameworks. For more information on managing entity risks with Athennian, please don't hesitate to get in touch with our team to request a free demo.
"Very easy to use, modern interface, excellent support. Athennian has an amazing conversion team. They helped us migrate all of our data and the training was very good."
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“When we were reviewing other entity management systems on the market, in some cases, we were not comparing apples to apples. But with Athennian, there was really no comparison. The paralegals were so excited to come on board.”
"There are so many things I like about this program, but the one thing that really stands out is the user friendly interface. The program is fast and allows me to enter corporate information very quickly and efficiently. I would also like to note that Athennian provides the most the fantastic customer service."
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