How Marsh & McLennan uses tech to manage global entities

Numbers say a lot about why Marsh & McLennan Companies is the winner of the inaugural award for best global entity management.

In April 2019 Marsh & McLennan acquired Jardine Lloyd Thompson (JLT) – the biggest acquisition in its history – and in doing so increased its legal entities from around 600 to almost 900. Over the past year or so a small team has integrated more than 100 legal entities with around 70 integration plans in 38 countries. Not only that, but each plan often includes between 10 and 15 transactions such as mergers, share transfers/issuances and share capital reductions. Quite a feat.

But the numbers don’t tell the full story. The pandemic has, of course, posed a range of challenges, and Marsh & McLennan’s team completed 40 of these plans while working remotely and while local regulators were operating at reduced capacity.

Entity management is an important tool for achieving business objectives. Legal entity integration plans target the most business-appropriate and financially beneficial way to combine businesses and legal entities in a jurisdiction. In order to make Marsh & McLennan’s project possible and enable the company to operate consistently, it was important to get the governance behind structures correct from the outset, explains Connor Kuratek, chief corporate counsel and assistant corporate secretary.

The team created a set of guiding principles that would be used in every jurisdiction, ensuring there was a standardized way to integrate entities wherever they were located.

Technology is also key to Marsh & McLennan’s success in entity management. Following the JLT acquisition, it was important to make sure the company’s legal entity management software was up to date and ensure the system was filled with correct information. The team systematized what had previously been ad-hoc reviews, introduced a quarterly review of company data and raised the profile of the database.

‘Our aim is for the database to be ‘one source of truth’ that can be relied upon for legal entity information, which is critical to integration and optimization plans,’ the team’s submission for the award states. ‘We realized that for the automated review process to be effective, we first needed to humanize it... [W]e contacted senior attorneys in each region and business to track down contacts for each legal entity – and we took that opportunity to be database ambassadors.’

The team hired an individual to a new role managing and promoting the database. This has been done in part by demonstrating that the system is a key business tool with much broader capabilities than simply looking up directors, officers and company numbers. The database manager explains how it can be used to meet legal and compliance requirements and to support business continuity by handling entity data and documents. The perception of the database is changing from a paralegal’s administrative tool to one that everyone in the department should use, according to the company.

The database manager now meets weekly with the chief governance counsel, chief corporate counsel and a paralegal to discuss continuing tasks and brainstorm how the system can benefit the business. These meetings have led to initiatives such as:

• The creation of a global entity management email account, which is monitored during UK and US working hours for entity management queries
• Using database features that were available but not understood or used such as storing documents, making filings and running reports
• Using issues logs, initially to track progress and then to identify FAQs, to develop a chatbot like one used by the compliance team.

You can read more about the Corporate Governance Awards in the Corporate Secretary Yearbook