Preparing to go public?

How new publicly traded companies can plan for first days as a public company

Any newly public company faces a new set of challenges. New public companies generally require updated processes, policies, and people to manage governance, IT, financial reporting, and tax, to name a few. Many of these actions have to be taken before the initial public offering (IPO), or in the days and weeks immediately after going public.

Since no two new public companies will be the same, the plan and workload will need to be tailored for each company, with likely many of the work streams running on parallel tracks. After going public, a company must address a number of matters that can be broadly categorized into seven work streams. The matters are:

• Finance and accounting: Closing financial reporting and quarterly earnings and other financial disclosures on time.
• Corporate governance: Corporate board oversight is essential prior to listing; a portion of the board must be independent and nonmanagement, and board members need to understand their responsibilities and fiduciary duties from day one. Overall governance measures need to be in place throughout the organization.
• Internal processes and controls: Even prior to reporting the first quarter of earnings as a new publicly traded company, significant controls and processes need to be in place to meet regulatory requirements. These center around rules, often in the Sarbanes-Oxley (SOX) Act of 2002, to create internal controls and related policies that are aimed at safeguarding of assets, reliable financial reporting, and reducing the risk of fraud.
• Information technology (IT): With information being a crucial asset in the modern corporation, IT as the custodian and protector of this information has a front-row seat for major executive-level issues and discussions. But many organizations in the growth phase have comparatively bare IT organizations and capabilities in place.
• Cyber: Related to IT, an organization’s cyber capabilities will be tested every day. But because so much of an organization’s operations and value is tied with its ability to protect data and maintain operations after a cyber threat is discovered, this capability can’t be delayed.
• Tax: Tax is often central to financial reporting and transaction planning. There may be complex tax situations, and many of these complexities relate to new tax structures. In addition, tax compliance and financial statement reporting remain important.
• Environmental, social, governance (ESG): For public companies, ESG disclosure may become more important as global regulators react to investor-led demand for more transparency on companies' sustainability performance and how they monitor, manage, and measure sustainability opportunities and risks.
  

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