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How Electronic Signatures Improve Governance

Posted 20th May 2022

How a business is run behind the scenes determines its success or failure. Bad practices, inefficient processes and poor risk management can be a recipe for disaster.

At best, bad governance can lead to a lack of accountability, negligence, and restricted business growth. At worst, it can result in outright fraud and corruption. For businesses that are serious about sustained and continued growth, bad governance should be avoided at all costs.

In our digital world, businesses are expected more and more to embrace technology that promotes good governance across their business. In this article, we’ll be exploring how digital signatures can help improve governance for businesses of all sizes.

 

What is Governance?

Before we discuss how e-signatures can improve governance, we should first define what we mean by the term. Investopedia defines corporate governance as:

“The system of rules, practices, and processes by which a firm is directed and controlled.”

Corporate governance encompasses a number of areas including compliance, ethics, risk management, administration, and corporate strategy. Some of the most basic principles of good corporate governance include transparency, fairness, responsibility, and accountability.

 

Why Is Good Governance Important for Businesses?

When a business engages in good corporate governance, the benefits are clear. By having a clear set of rules, processes and company practices, businesses run a lot smoother. Good governance promotes economic growth and long-term financial viability.

It not only helps provide a direction for the company but also promotes trust with employees, stakeholders, and the wider community. In short, it helps to cultivate ethical business practices and a good reputation.

And who would you rather do business with, a well-run, strait-laced business or a company with a reputation for cutting corners and shady practices? The choice is clear.

 

How Can E-Signatures Improve Governance?

Many businesses now rely on technology as an essential part of their daily processes. This means that technology can directly impact your corporate governance. You therefore need to ensure that you choose tech that has a positive impact on the way your business is run.

E-Signatures and digital documents can bring a number of benefits to a business such as streamlined processes, reduced administration and increased efficiency. But electronic signatures can also help you tick all the boxes for two key tenants of good corporate governance: transparency and accountability, as well as some of the practices that make up good corporate governance e.g., risk management, and compliance.

Let’s take a look at the 5 top ways that electronic signatures can contribute to good corporate governance across your business.

 

They Verify Your Signatures

Businesses can easily fall victim to cybercrime or fraud if the proper security measures aren’t taken. This could compromise sensitive data or cause your business to lose money. Luckily, the technology behind digital signatures can detect if the signature isn’t legitimate.

Using a mathematical algorithm and a digital certificate, a digital signature verifies the legitimacy of both the signature and the documents. When a document is signed the algorithm creates a pair of keys, public and private, which encrypt and decrypt the document. If these two values do not match then the signature is not valid.

They Ensure Transparency

Transparency is one of the most important aspects of good business governance. It demonstrates that your business operations are legitimate and above board. Electronic signatures help to make your document transactions more transparent. They provide additional, unalterable data that traditional signatures simply can’t.

When a document is signed, information such as the date, time, IP address and signer is recorded. This creates a full audit trail for your documents and allows you to easily retrieve information about your transactions. A study shows that 56% of participants experience improved document tracking and traceability for auditing purposes thanks to digital documents.

They Ensure Integrity

Traditional signatures are used to indicate approval or agreements in many corporate, financial, or legal settings. Despite this, handwritten signatures are hardly infallible; they can be easily forged and documents may be tampered with after the fact. This could leave your business transactions vulnerable to fraudulent or malicious activity.

Thanks to their use of digital certificates and trust providers, electronic signatures and their digital documents provide a high level of assurance. If a document is altered after it has been signed, the signature becomes invalid.  A digital signature, therefore, confirms the integrity of the document and its contents.

They Drive Digital Transformation

Businesses across the country are realising the immense benefits that digitisation can bring. Handwritten signatures simply no longer belong in the digital world. In fact, they can impede digitalisation efforts and keep your business stuck in the past. If left unchecked, this could lead to inefficient processes and bad governance

Conversely, an electronic signature can support your digitalization efforts and allow you to adopt digital documents across your business. As you no longer have to switch between paper and digital working, this ultimately allows you to create a streamlined and efficient process.  You can even take this one step further and add automation, reducing the manual effort that goes into document processing.

They Improve Efficiency

Your business processes fall under corporate governance. For a business to operate smoothly, you need efficient processes behind the scenes. Paper-based processes are quickly becoming outdated and could negatively impact your business governance. One study conducted across a law firm found that employees spent 8 hours per week on processing paperwork.

Electronic signatures help your business move away from paperwork and towards digital documents. Eliminating paper-based processes will streamline your workflow, reducing the time you spend on administration and free up working hours for higher value tasks.

 

How Does E-Sign Improve Governance

Here at E-Sign, we know that good governance is a high priority for our users. That’s why our features support accountability, security, and authenticity. Let’s take a closer look at how E-Sign can improve your corporate governance:

 

Trust Provider

A trust provider is involved with the creation and validation of electronic seals and digital signatures.  E-Sign is a qualified trust provider and conforms to all the requirements set out by the eIDAS.  You can be sure that your documents and data are supported by the highest industry standards.

Qualified Electronic Signature

A Qualified Electronic Signature is 100% verifiable and backed by a unique digital certificate. This type of signature provides a high level of authenticity and integrity. It meets the following criteria:

  • They are uniquely linked to and capable of identifying the signatory
  • They are created in a way that allows the signatory to retain control
  • They are linked to the document in a way that any subsequent change of data is detectable.

Full Audit Trail

E-Sign’s qualified e-signatures are supported by both a digital certificate and a full audit trail. This provides transparency about your transactions and makes it easy to retrieve information about the document process. Info such as data/time stamps, IP address and signer details provide your business with additional data that supports your transactions.

Electronic Seal

Electronic seals are similar to e-signatures but can only be used on behalf of a ‘legal person’ such as a business, charity, or institution. This helps provide peace of mind about the origins of a document and guarantees its authenticity. Once applied, the contents of a document cannot be changed, providing a high degree of integrity for your business data.

 Verification Tools

Ensuring the confidentiality and security of your data is a big part of good governance. Thanks to encryption and cryptography, our e-signatures are already highly secure. To protect your digital documents, we also offer a range of verification tools to stop your data from falling into the wrong hands such as SMS authentication, password protection and integrated ID.

 

Get Started Today with E-Sign

If you’d like to try E-Sign for yourself, sign up today for a 14 day free trial. We want everyone to discover the power of E-Sign for themselves. With no payment details required, no downloads and no software to install, it’s never been easier to try our E-Sign and digital document platform for free.

 

 

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