The current Coronavirus pandemic, the economic lockdown and the new remote working arrangements have impacted almost every business and function. With governance and authorisation being among the most affected operational areas, we’ve prepared a 2-part blog series on how different sectors are adapting their governance practices and policies to the new norm. In the first part, we cover the following sectors: Banking & Finance, Education, Public and International Traders.

1. Banking & finance

In banking, one of the biggest governance challenges for organisations during the pandemic seems to be the management of power of attorney approvals. The reason for this is that power of attorney is required to be signed as a deed under English law and most international jurisdictions, which causes some practical difficulties with the implementation of such documents under the current remote working circumstances - a deed is typically signed using wet ink and needs to be witnessed by someone else.

With most banks now starting to replace wet ink signing approvals with electronic signing, many organisations (perhaps for the first time in years) will have to review their Authorised Signatory Lists and the process for managing them.

According to one of the world’s top law practices, Clifford Chance, “signature management” should be one of the top 7 considerations for investors and businesses during the pandemic.

To ensure the business’s long-term sustainability, a leading financial consultancy in the UK, Hymans Robertson, also recommends organisations to review their signing requirements and make any changes if required (e.g. adding clarifications on notification and settlement periods and the acceptance of electronic signatures as well as adding or removing signers to their authorised signatory lists).

Financial companies should also make sure that any changes made are effectively and promptly communicated with all relevant parties within the business, and that the latest authorised signatory lists are available.

2. Education

Schools and higher education institutions might be facing issues with remotely implementing commercial contracts and exercising force majeure clauses* on any existing obligations that can no longer be fulfilled due to the Coronavirus.

Although electronic signatures are valid under most jurisdictions worldwide, there’s still certain circumstances when electronic signatures cannot be used.

For more information on using e-signatures during COVID-19, you can read our blog here.

The UK legal practice Stone King has provided some key practical tips for schools to consider when implementing commercial contracts during the pandemic. These are:

making sure their lists of authorised signatories are up-to-date and readily available for remote access,
adding any additional approvals for the use of electronic signatures,
issuing technical guidance and support for the effective implementation of signature approvals online.

3. Public sector

In the public sector, the NHS is undoubtedly one of the most impacted organisations by the Coronavirus outbreak. In terms of governance, the biggest challenge for NHS trusts is the management and authorisation of financial transactions.

To help NHS finance teams successfully overcome this challenge, the UK Healthcare Financial Management Association (HFMA) has provided a detailed practical guide on the top COVID-19 financial governance considerations for NHS. These include:

schemes of delegation and standing financial instructions (SFIs), including managing and sharing authorised signatory lists remotely,
collecting and coding financial information that is auditable and evidenced,
documentation of key decisions,
review of business continuity plans,
changes to financial processes/systems to allow this to work.

4. Authorised trading companies

For all UK companies authorised to trade internationally, the HMRC has made some temporary changes to its customs policy and authorisations to assist them during the COVID-19 pandemic. The changes apply to the following businesses who are authorised to:

use temporary storage or customs special procedures such as inward processing or customs warehousing,
use simplified declarations such as entry in your records,
have a guarantee,
operate as an Authorised Economic Operator.

Companies who are unable to comply with a condition of their authorisation due to the pandemic can apply to temporarily change their authorisation by emailing their supervising office with the subject ‘COVID-19 customs easement request’.

Has your organisation’s governance been affected by the Coronavirus?

Have you already made any changes to your existing processes?

How do you ensure all your signatory data is secure and up-to-date whilst operating remotely?

Managing Authorised Signatory Lists effectively and efficiently is clearly more important now than ever before.

Cygnetise provides a secure, real-time signatory management platform, equally accessible from principle or remote locations.

To learn more about Cygnetise’s application and request a free demo, please email our team at info@cygnetise.com.

* What is a force majeure? Most commercial contracts contain a force majeure clause, often buried amongst the so-called boilerplate provisions. The purpose of such a clause is to protect the parties from a breach of contract claim if they are unable to perform their obligations because of an event that is outside their control. (Source: https://www.farrer.co.uk/)

Signatories and Authorised Personnel: An industry overview of good governance during COVID-19