Nasdaq Ventures invests £3.5m into UK-based governance platform

Nasdaq Ventures announced today the completion of a £3.5 million Series A investment into Kuberno - a global legal entity provider for corporate secretaries, legal teams and governance professionals.

Kuberno, a UK-based company, also provides solutions to a range of household names including businesses within the FTSE100.

In 2021, they created the first global entity governance platform - Kube.

Kube combines entity management functionality with a unique secretariat practice management system, which automates administrative tasks, creates data insights and reports, manages documents and data and can perform e-filings and form creation.

In connection with the Series A financing, Kuberno will now launch a commercial partnership with Nasdaq Governance Solutions that includes a planned product integration into Nasdaq's suite of governance solutions.

The investment marks Nasdaq's first advance into the legal entity governance space, reflecting businesses' growing interest in governance as they respond to an increased focus from regulators on entity management.

New reputational and regulatory risks have forced the management of legal entity governance and compliance to become a priority for investors.

According to Daniel Connell, Deloitte Global Leader for Legal Entity Management, what was once considered "housekeeping" is now the focus of a cultural shift within organisations; they are now embracing new skills, technology and operating models to manage their entity management obligations to satisfy revenue authorities and meet expectations of transparency on a global scale.

Following the 2008 Financial Crisis and significant conduct failures such as the manipulation of the London Interbank Offered Rate, the UK government began to initiate reforms on entity management regulations.

The Senior Managers Regime (SMR) came into force for the UK financial sector in March 2016. The SMR seeks to ensure that financial institutions adhere to exemplary standards of governance and accountability.

The Financial Conduct Authority describes the SMR as an opportunity for financial institutes to establish healthy cultures and effective governance by encouraging individual accountability and setting standards for personal conduct.

The recent extension of personal liability to directors for non-compliance is not just limited to entity management, but also sustainability and cyber-security.

In March 2022, the Securities and Exchange Commission (SEC) issued proposed rules that would require public companies to include extensive climate-related information in their registration statements and periodic reports.

Disclosure concerning climate-related risks and impacts, oversight and governance of climate-related risks, climate-related financial statement metrics, climate-related goals, and greenhouse gas emissions would become a legal requirement.

The changes come after the European Union reached a deal last month to almost double the share of renewables in the 27-nation bloc's energy consumption by 2030, amid efforts to become carbon neutral and ditch Russian fossil fuels.

Risks associated with cybersecurity and data privacy have also received increased attention in new legislation.

In March 2022, President Biden signed into law the Cyber Incident Reporting for Critical Infrastructure as part of an omnibus appropriations bill and last month he authorised an executive order after at least 50 U.S. government staffers stationed in 10 countries were targeted with commercial hacking tools.

The new executive order was designed to apply pressure on the secretive industry by placing new restrictions on U.S. government defence.

The SEC has proposed rules to enhance disclosures regarding cybersecurity risk management, strategy, governance and incident reporting. The change in the law would require companies to report material cybersecurity incidents within four business days and provide updates to investors regarding previously reported incidents in their periodic reports.

These reforms, which began in the UK, have led to increased scrutiny of business finance and data management around the world.

Last month, Credit Suisse and the SEC engaged in a months-long debate over the severity of reporting deficiencies that led the Swiss bank to delay its annual report.

The SEC had asked the bank to explain how it decided that an "entity-level material weakness did not exist" for its 2021 and 2022 financial years.

Nasdaq's new partnership with Kuberno seeks to address tightening entity regulations for major finance companies.

According to Gary Offner, Senior Vice President and Head of Nasdaq Ventures, their involvement with Kuberno will simplify the increasingly complex world of legal entity management, enabling better corporate governance and efficiency for corporate secretary teams.

For Kuberno, Nasdaq represents the "dream partner".

Zoe Bucknell, Kuberno's Co-founder and Head of Product Design said: "The partnership will enable us to launch Kube into the global market, building on the strong, sustainable foundations we have laid over the last three years."

She added: "Proceeds from the Series A financing will help Kuberno accelerate its international growth and expansion into new markets."

The organisation, which has grown significantly since launching in September 2021, is now relied upon by a range of clients, such as the Big Four in the UK; and global partners in the US, EMEA and APAC regions.