As legal counsel, staying on top of corporate housekeeping can be your biggest challenge, especially when it comes to entity management. As the central point for managing corporate records, company structure, compliance and risk across multiply entities, you want to be accurate and thorough in all that you do. And this can be hard if your info is spread across various spreadsheets and databases, as they simply weren’t built for such a task. So if you find your current system for managing corporate housekeeping for your company and it’s subsidiaries a little fragmented to say the least, then Claudia Jacobs, Privacy & Legal Officer at Vebego, can surely relate.
For companies operating several departmental databases, there is the prevalent issue of decentralized contract management whereby contract information is scattered around the buisiness. And should a potential investor come along or a merger take place, that issue becomes a big problem – especially for the legal department. This very well could have been the case for Elisabeth Hondius, legal head of biopharmaceutical company, MSD. She recalls how she used to have enough difficulty finding information as it was before her company merged with another. A familiar plight for in-house lawyers everywhere, she says many departments would manage their own contracts, giving her little insight and control.
Pulling together a risk management plan for your company is no easy feat. Firstly, you need to properly identify the full gamete of risks that could impact your business. Then gathering and compiling all the necessary information requires time and resources. But arguably the most important step of all is calculating the level of risk by creating a Risk Assessment Matrix. This is what the business takes out from the assessment and puts into action. It requires a high level of expertise and advanced analytical skills if you want the findings to be accurate and credible.
Think you could turn around a prompt and thorough due diligence report verifying your company’s net worth if a potential investor or buyer came along? It is estimated that every year 7.5% of all company documents are lost and 3% are misfiled at a huge aggregate cost to businesses to locate or recreate these files. Not to mention that failure to provide complete information could cost your company the deal. So don’t let this be you! A large part of proving your company’s net worth includes real estate, assets and all intellectual property and this needs to be chronological, up-to-date and accurate. As a CEO, CFO or Legal Counsel, you might have most of this information on hand, but it doesn’t hurt to consolidate what you do have and areas you may need to address.
Whether you’re a start-up or working for a well-established enterprise, one day you could find yourself lumped with the onerous task of due diligence reporting for a potential buyer or investor – and you’ll want to be prepared. If the preparation of due diligence falls on the CEO, CFO or sole Legal Counsel, it always pays to have a checklist of the key requirements upfront to ensure you don’t leave any stone unturned, and that the process runs as smoothly as possible. Here is a run down of some of the initial records and documentation to help get you on your way to due diligence perfection.