Law firms, asset managers, institutions and the public sector… professionals in corporate governance. This one’s for you. 

To know you is to see the invisible world of operations with you.

All the things your clients take for granted – the amount of paperwork, back-and-forth shuffling of details, compliancy checks and storing of all legal documentation – are warm reminders that you’re home. 

This is the universe of corporate governance. The system of rules, practices and processes that governs all our businesses, institutions, nations and intergovernmental bodies. We couldn’t take one legal step without it, albeit it comes with some pretty heavy bureaucracy – as well as liability. 

 

Shifting trends in corporate governance

In many ways, today’s trends and demands in corporate governance are changing. Clients come in increasingly better-researched and prepared than before. A great price-quality ratio is an expectation, not an exception. 

So what are you doing to fundamentally improve your offering? It is a legitimate question hanging on anyone’s lips today. Just like: are you using technology to do that? If so, how? 

A review on Harvard Law suggests the shifting trends in corporate governance are demanding better board quality, effectiveness and accountability across global markets. This impacts all stakeholders from directors to the agent handling the paperwork. 

Let’s take a look at some of the biggest shifts in this space – and learn how Smart Companies can help you shift, too.

 

Increased shift into paperless governance

Whether your underlying motivation is productivity, saving costs or saving our planet, all things in the form of physical paper are being rapidly digitized into a virtual office. This may sound like a chill walk in the park – but we know the reality can look quite different. 

As a professional in the legal space you need to keep certain documents for a defined period of time. While doing this, two things stand out in your document management system: 

  1. The ability to ‘freeze’ a document so it cannot be changed, and 
  2. An audit history. In case there are any changes to a document, they can be traced. 

We know that one of the most persistent challenges shared by many law firms is their high volume of electronic documents. They are uncategorized, unclassified and unorganized, found lying in individual folders and inboxes. This creates broken and incomplete portfolios to client cases and corporate governing history as offline files are not properly linked to their online documents. 

It’d be easy to write this off as being lazy. More often than not, however, this is due to lack of integrated systems that communicate with one another. Some transactions simply happen offline, others online, the requirements are different, just like their channels, documentation and processes. Many try to solve this by hiring a team of admin workers whose sole job is to classify documents, which isn’t a bad option, but – there are alternative ways of doing things. 

 

Increased risk of cyber security

This part needs no long explanations.

The more you rely on technology to store all your paperwork, the more you need to pay attention to the security layers protecting those databases. 

Most corporate boards still fail to allocate the same level of routine oversight to cybersecurity compared to other areas of financial reporting. Yet the consequences of breached security can be fatal. And it’s not a simple issue to tackle either. 

Cybersecurity itself is nothing new, the challenges of it have just evolved to be much more complex than before. So much so that a simple prevention and check-list method isn’t likely to do the trick anymore, especially with the SEC now assessing cybersecurity risks with the same relevance as it does all other economic and business risks. This applies especially to internal controls, financial reporting and public disclosures. 

Increased emphasis on long-termism and impact

As a growing trend over the years, the spotlight is being placed on an organization’s long-term decision making, intended direction and ESG (Environmental, Social, Governmental) issues.

Those of you doubting whether sustainability agenda runs counter to their shareholders’ wishes, the largest senior-level study on investment firms recently found that this kind of perception, is outdated. 

With ESG issues running on top of mind of most executives of the largest investment companies universally, we know the landscape is already changing. Therefore, an overview of the overall strategy is becoming increasingly more important. 

An overview of overall strategy is no longer a once-in-5-years kind of an assessment but rather a perpetual process of adapting, changing and transforming.

In such an environment, the ability to have a bird-eye view over everything that’s happening in one’s corporate governance: past and present, accessible from whenever and wherever one wants, has become just that much more relevant. 

 

Increased demands on Board quality and composition 

Because shareholders and investors cannot see behind the curtains of the boardroom, they have to trust the governing system in place. So regardless of if you’re a small investment fund, a public company or the legal body executing actions for the board, increased scrutiny around how equipped the board is in things like transformation, capital allocation and long-term planning is real.

Things like increased transparency and more independent evaluation processes are becoming a general expectation. Just like disclosing of board competencies, succession planning and board diversity.

 

Smart Companies help you shift with these trends, not against them

A friend of mine used to say only dead fish go with the flow. And while this little line may have some truth to it somewhere between novel originality and good old rebellion, the world of corporate governance may just go better when you swim with the stream, not against it. 

In order for this to happen, we need to pay attention to the shifting landscape towards a more paperless, transparent and holistic model.

Therefore, we need a system in place that helps us towards:

(1) a more virtual model of managing all paperwork that also helps categorize, classify, track and trace our history
(2) a more secure place to store data that minimizes exposure to single-point vulnerabilities in cyberspace
(3) a one-stop solution that presents an overview of all things corporate governance for longer-term strategic planning
(4) increased transparency, accountability, oversight and performance in corporate governance 

You would agree with us saying that the way you design your governing system will determine how it performs, wouldn’t you? 

Now, this is exactly what we designed Smart Companies for. 

 

A paperless self-governing system 

Not only clients come in more prepared today, so do employees. Demands of being able to access their files remotely, in the evenings and from home are regular expectations that come with all stakeholders related to corporate governance today. 

Smart Company dashboard provides professionals a digital platform that offers full accessibility 365, 24 hours a day. Different viewing options are a way to control who gets to see what. And the smart contracts run with built-in compliance, governing itself. 

Most professionals working in corporate governance operate in a document-heavy environment. Therefore, the ability to navigate in this space completely without them, just by clicking a few buttons digitally to initiate, execute and finalize these corporate events, can be a breath of fresh air. 

There is no need to keep additional records of these online documents as they are already classified on the dashboard. Each transaction comes with all relevant information and validates itself with immediate legal effect when all predefined terms are met. These data are also audit-proof as access, trackability and traceability can just as easily be viewed. 

 

Tamper-proof cybersecurity 

Certainly one of the most unique aspects of having your corporate governance on the blockchain is its security from tampering. Immutable by design, all changes and modifications to the data gets automatically recorded on protocol-level. Smart Companies run 100% on Ethereum, meaning there is virtually impenetrable wall between a hacker and your information. 

As recent large-scale cybersecurity breaches have shown, the ability to detect, respond and recover from an attack can be imperative. As opposed to those that have failed to identify the underlying cause. Exposing the company and its clients personal, private information with great legal risks as well as reputational damage. 

That said, it’s important to remember that no digital environment is impossible to attack. Therefore, we wouldn’t go as far as calling blockchain the ultimate weapon against security breaches but those who do, are certainly not short of reasonings either. 

After all, blockchain’s technology is based on distributed ledger. This means that each node inside the system has insight into any manipulation of data, exposing potential cyber crime attempts in real-time.

The technology was designed to replace trust intermediaries in the first place.

Therefore it does have some say in tackling our current security challenges. 

 

One-stop solutions for overseeing strategy

Long-termism, identified as one of the key drivers for corporate governance today by Harvard Law, the importance for a one-stop overview is growing rapidly. Why scatter all corporate events in a dozen different places when one platform could keep track of everything? 

Smart Company dashboard offers one place for all things corporate governance.

As a law firm, you’ll be able to have a quick glance to understand where your client’s governance is standing. Passing, transitioning and adding team members onto an existing client case is just as easy. Phases requiring more complex understanding and M&A structuring is supported by the ability to track, trace and see all corporate events in real-time. 

As an agent, you may be executing these legal actions for your client. Same thing applies to you. If your client is executing some of their tasks themselves, you’ll get an automatic notification, that’s it. No action required. All data is recorded and stored on the dashboard. 

For asset managers, startup incubators or accelerators: you’re likely to be handling a portfolio of hundreds and thousands of companies. Being able to pull out information for due diligence, understanding your portfolio company’s ownership structure, treasury, shareholders and so on make a big difference in your daily work. 

 

Increased efficiency, efficacy and effectiveness of governance

Smart Companies do not only provide a digital platform for corporate governance, but also a virtual governing system. It streamlines workflows into a single click of a button, saving time and money. Regardless of if you’re the Director of the Board or an agent in a supporting role. 

We have consistently said that Smart Companies save 75-95% off your time and costs compared to the global average in the traditional world. These are based on direct measures and metrics.

But we also know there are numerous indirect measures such as the ability to reallocate your resources into the actual business. 

Being able to run things 100% paperless is only a small step into a much more sophisticated system:

  • The ability to get automatically notified of transactions that are happening in real-time
  • Not having to worry about their compliance or legal validity
  • Having smart escrows in place to make sure terms and agreements are met before releasing executions, and
  • Not having to worry about creating, uploading or storing legal documents…

These are seriously just a scratch on the surface of what Smart Companies can do for professionals in corporate governance. 


Last but not least, don’t take our word for it, as we always say. 

Try it for yourself – and let us know how we can be more useful for you. If you’ve made it this far, you’re probably deep in the waters of corporate governance – but so are we 😉 


Thanks for reading, hope this was helpful! 

Corporate governance Smart Companies