The compliance landscape seems to be forever changing. Whether you're looking after a multinational legal structure or a handful of entities, it's difficult to both keep up with those changing regulatory pressures and ensure you're in good compliance across legal structures. Compliance and good standing are essential if you want to keep operating, but the risks of non-compliance are growing with each change in regulation. Each year, the cost of non-compliance to businesses now runs an average of US$14.8 million, a 45% increase since 2011 - while the cost of monitoring and remaining in compliance was found to average US$5.5 million, up 43% from 2011. In addition, estimates suggest that regulators in the US and Europe will have imposed US$400 billion of fines on banks for misconduct since 2009. Can your organization afford to risk its compliance state? The need to ensure compliance doesn't just relate to a single entity; it's a need that transcends the whole legal structure. Organizations need a way to be able to both track compliance wherever it has an entity incorporated, and to rectify any potential issues before they become major challenges. There should be a structure-wide robust and flexible entity management practice, bolstered by the appropriate technology and policies to help ensure compliance across the legal structure.

Essential steps to compliance for legal structures

Compliance for legal structures comes in many forms, but revolves around three main areas:

• Standards, such as ISO 27001
• Regulations, such as SMCR
• Laws, such as the Modern Slavery Act

There are also the internal obligations that come from the culture and operating model of the organization, including contracts, policies and frameworks - for example, the internal complaints procedure, signing authority, governance frameworks and supplier contracts. To ensure compliance across legal structures, organizations should consider the following five steps as their initial goals.

Step 1: Identify compliance needs

The most important step in ensuring compliance across legal structures is to identify what that compliance needs to look like. Research the regulations and the cultural practices that your entities will be expected to uphold wherever they are incorporated, as well as any industry-based regulations that your organization falls under. This is especially true for any highly regulated industries, such as financial services and health.

Step 2: Create a structure-wide plan for ensuring compliance at all times

Once you understand the compliance landscape for your organization, decide how your legal operations must be structured to support that across the whole group. Don't be too rigid in the planning - you need to retain some flexibility to deal with unexpected issues and changing regulation - but a group-wide compliance calendar is essential.

Step 3: Enact local policies to support that structure-wide compliance plan

Of course, compliance isn't all global; every jurisdiction has unique policies and regulations of its own. Your research at step one should have identified these, so take time to assess the group-wide plan and make sure it takes into account any local-specific issues. If it doesn't, add these to the global calendar so that everyone remains on the same page.

Step 4: Decide risk-mitigation and issues-handling processes both locally and globally

There's one thing you can guarantee about compliance: It won't always go smoothly. While much of your process could be handled by automation to streamline operations, there are some things that even AI can't foresee. Devise a risk mitigation strategy, and make sure everyone involved in compliance across legal structures understands the role they must play in identifying and monitoring for breaches and issues so that they can be dealt with before they become a threat to good standing.

Step 5: Find a way to monitor compliance in real time

Finally, your initial compliance planning should include real thought as to how you can monitor and track compliance. Legal structures can have a lot of plates spinning at any one time, and it's important to ensure not a single plate comes tumbling down. The best way to do this is to use software to create a dashboard to give you an at-a-glance view of the compliance state across legal structures in real time, and to flag any potential issues for you to deal with.

Technology helps to drive compliance across legal structures

With 68% of legal departments facing increasing legal work demands, and 90% citing controlling costs among the most common high priority among legal departments, it's clear we need a simple and efficient way to monitor and track compliance across legal structures. Manual tracking and Microsoft Excel spreadsheets or SharePoint are neither flexible nor robust enough to meet the needs of modern compliance and regulation. Many in-house legal departments and legal operations teams have been turning to purpose-built technology solutions to solve the problem of compliance across legal structures. The Thomson Reuters Legal Tracker'Ѣ Legal Department Operations (LDO) Index Report for 2019 found 70% of departments identify the use of technology to automate and reduce manual processes as a high priority, with more than half saying they had increased their use of technology in the last two years. It's a simple yet robust solution to manage the combination of an increased workload and growing budgetary pressure, balanced against the external regulatory pressures mounting on legal operations, compliance and governance professionals. Entity management software, such as Diligent's Entities and Compliance offerings - can help to reduce this burden and streamline legal operations. Diligent Compliance is a leading indicator for well-managed risk and effective compliance, providing organizations with a way to assess how they perform against internal and external obligations. Diligent Entities, on the other hand, is the market leader in supporting legal operations to ensure ongoing compliance and accurate entity data by centralizing entity information, enabling filing with regulator bodies and creating a compliance calendar with reminders for deadlines. Together, Diligent Compliance and Diligent Entities can help organizations to:

• Measure their compliance activities
• Create an action plan to improve compliance based on deficiencies and late filings
• Create more meaningful reports for internal and external stakeholders, such as regulators, auditors and leadership

Get in touch and request a demo to see how Diligent's suite of governance, risk and compliance (GRC) software can help your organization to ensure compliance across your legal structures.