Even today, with global pandemics threatening business continuity and stock market crashes impacting shareholder interests, some organizations are still using spreadsheets to manually track compliance. They have foregone the robust and secure entity management software options available, and decided to stick with something like Microsoft Excel and SharePoint because it's there, it's easy and it won't cost more money in license fees.
However, spreadsheets create risk for organizational compliance. Not only does spreadsheet-based entity management take more time and more resources ' an average of 18 hours each month in modifying, consolidating, correcting and updating information, according to one piece of research ' but spreadsheets create risk by making it easy to introduce errors. They can also lead to data leaks and inefficient processes, and complicate entity management, especially in large multinational legal structures.
Diligent Entities is built to help organizations to mitigate the governance and compliance risks inherent in manual tracking of entities. By centralizing and effectively structuring the corporate record, Diligent Entities helps to improve entity governance to better ensure compliance and improve decision-making.
It provides a central repository to store entity information, documents and organizational charts in a highly secure format to create a single source of truth. Compliance calendars, reminders and workflows create better data for managing the ongoing accuracy of the corporate record, while reporting and filing can happen from within the system. Diligent Entities was created to help surface the right information to the right people at the right time.
Get in touch and request a demo to see how Diligent's entity management software can help your organization move from risk-prone spreadsheets to the world of automation and cloud-based collaboration.
However, spreadsheets create risk for organizational compliance. Not only does spreadsheet-based entity management take more time and more resources ' an average of 18 hours each month in modifying, consolidating, correcting and updating information, according to one piece of research ' but spreadsheets create risk by making it easy to introduce errors. They can also lead to data leaks and inefficient processes, and complicate entity management, especially in large multinational legal structures.
Here's how spreadsheets create risk for entity and compliance management
While many compliance managers may feel more comfortable with the familiar-looking spreadsheets of Microsoft Excel or other corporate software packages, the use of spreadsheets creates greater risk for organizational compliance. Let's look at some of the bigger risks that can be introduced when using spreadsheets for compliance.Risk of human error
Spreadsheets create risk because they are controlled by humans ' it's that simple. It's too easy to introduce erroneous data, to accidentally press the wrong key or add an extra zero, or to reset formulas or delete macros by mistake. This can lead to all manner of issues for an organization, as Barclays Capital found when it mistakenly purchased almost 200 additional Lehman Brothers' US assets after a reformatting error in an Excel spreadsheet. Now consider the impact of incorrect data going into a regulatory filing, or influencing an M&A procedure.Lack of version control
There's also the risk of duplicate versions of the same spreadsheet being worked on and updated differently by different people around the business. When there is no single source of truth for entity management, spreadsheets create risk through a lack of version control. How do you know the entity data you are accessing is the most recent, up-to-date version? How do you mitigate the risk of an extra version being created and updated with different data from the original, causing confusion among compliance stakeholders?Immediately out-of-date
A spreadsheet is, by default, a static object. Once you input data, it can no longer be updated unless you or another human goes in and updates it. This lack of dynamic updating means spreadsheets create risk by being immediately out-of-date. It leads to a need for vigilance within the entity management and compliance teams to ensure the right documents are updated manually at the right times to complete routine business processes ' and that's a lot of manual updating and tracking, and a lot of resources and effort.Difficult to enforce policies
It's also difficult to enforce in-house policies and processes when updating entity management manually using spreadsheets. The IT and compliance team set up processes and policies to ensure an efficient flow of information, correct access rights for the correct stakeholders and streamline entity management. Spreadsheets create risk, as it's difficult to enforce these policies on a static document; you're relying on those managing the spreadsheet to stay up-to-date with in-house policies and follow them in the correct way, which means you'll need to maintain a rigorous training program.No audit trail
Of course, when it comes to audit time, you'll have no audit trail of how entity data has been edited and updated over the course of the year, which means spreadsheets create risk for compliance by hiding these essential steps from auditors. It makes the audit process more complicated and more risky, and can lead to sanctions and filing issues arising.Poor data protection
Equally, spreadsheets create security risks for compliance and entity management, as they are easy to email to the wrong person, or to be accessed in a data leak. When organizational compliance is handled through secure technology platforms, this risk is mitigated ' it's much harder for sensitive entity data to fall into the wrong hands when it's protected by state-of-the-art security measures.Regulatory updates can cause havoc
Finally, spreadsheets create risks for organizational compliance not only because of manual tracking, but also because it's more difficult to keep track of and put into action any regulatory updates that impact the business. When technology is in place to sync with local regulators for filing purposes, it's more straightforward to understand when something has changed and needs a different approach. Without that, you risk filing the wrong information and losing good standing.Moving to entity management software helps to mitigate GRC risks
The good news is that robust technology is available to help you mitigate these risks created by using spreadsheets for organizational compliance. Technology helps to build digital trust within the organization, and with auditors and regulators as well.- Automation helps to ensure that no deadlines are missed and no actions are left unchecked.
- Security is enhanced when using entity management software that complies with leading regulations, including state-of-the-art encryption, data storage and access controls.
- Collaboration helps to break down internal silos and ensure all stakeholders can access the same entity data in real time.
- Communication becomes more streamlined when it happens in a single source of truth.
Diligent Entities is built to help organizations to mitigate the governance and compliance risks inherent in manual tracking of entities. By centralizing and effectively structuring the corporate record, Diligent Entities helps to improve entity governance to better ensure compliance and improve decision-making.
It provides a central repository to store entity information, documents and organizational charts in a highly secure format to create a single source of truth. Compliance calendars, reminders and workflows create better data for managing the ongoing accuracy of the corporate record, while reporting and filing can happen from within the system. Diligent Entities was created to help surface the right information to the right people at the right time.
Get in touch and request a demo to see how Diligent's entity management software can help your organization move from risk-prone spreadsheets to the world of automation and cloud-based collaboration.