Q&A: How Diligent is helping companies transition to a modern back office
A modern governance company, Diligent works with businesses to deliver insights and Software-as-a-Service (SaaS) solutions across governance, risk and compliance (GRC), as well as ESG.
The firm currently caters to over one million users from 25,000 customers around the world, boasting 75% of Fortune 500 and 85% of FTSE companies as clients.
FinTech Futures recently spoke with Lisa Edwards, executive chair of the Diligent Institute, the global corporate governance research arm and think tank of Diligent, to discuss the company’s work in the space, her views on ESG and her experience as a woman in tech.
FinTech Futures: What does Diligent offer to customers?
Lisa Edwards: Diligent is really the global leader in modern governance; we provide SaaS solutions across governance, risk, audit, compliance and ESG. We did over a billion dollars of acquisitions during the pandemic. We augmented our solution set to beef up areas of compliance, audit, ESG and even data services.
We have some very unique data services such as sanctions watches for customers. They help customers with data on compensation and activism and all that kind of stuff. So we’re really bringing that all together into one platform under the GRC umbrella. That’s how we spent our pandemic.
Could you share some examples where Diligent’s solutions have made an impact?
We recently did a couple of economic impact studies to determine ROI, and one of the interesting things that we found for both our governance and our risk and compliance solutions is that there’s material savings and a fast payback to automating what you do.
Finance operations and back-office stuff is not as visible, it’s not as revenue generating.
I really think GRC in general is one of the last places where digital transformation hasn’t fully touched, which I think is normal because it’s one of the last bastions of not being digitally transformed.
People are now recognising they also need to invest in efficiency and effectiveness in the back office and thinking through how to be more real time as they look at the risks of the company, and how to, instead of looking at tiny samples of data, look at full samples of data.
Those are the kinds of wins that we look out for with our customers – where they say this has transformed the way that I am able to evaluate the risks of my company, make sure that my audits are complete and my third-party assurance is working well, that my internal controls are up to speed and really monitoring the business.
So, it feels really good to be part of a company that’s helping customers make an impact, and helping create customer heroes in businesses because they’re able to see across the business in a more holistic way.
Who are your competitors? How are your solutions different to theirs?
There’s a couple of legacy players in the space, but they tend to be a completely different technology stack and approach. Our biggest competitor is still spreadsheets. It’s still customers doing this manually and without a real workflow. Even when I was at Salesforce, we managed some of this stuff on spreadsheets.
In some philosophical way, the competition is the status quo, and people doing what they’re used to doing. So getting them over the hump to say “we can make this better, easier and automated for you” is the more common conversation.
What kind of clients do you usually get? Are they bigger companies or start-ups?
It’s a balanced mix. We certainly have big enterprise customers who rely on us to manage their businesses and help them govern their companies, but also the mid-market. In the fintech space, we have eight of the top 10 banks in the US as our customers; we have a lot of financial services customers.
We’ve reached all the way down though, too. We have a product that’s specific to non-profits. So even companies that are at a different price point and with a different mission are able to leverage our solutions.
Have you noticed any particular trends with companies since the pandemic?
I think the pandemic accelerated digital transformation by five years. Companies that were, for example, thinking about automating audit functions, all of a sudden had to because they couldn’t travel to that factory in India, or they couldn’t go to their subsidiary in Brazil. They had to have the means to look at digital files and inspect them.
The pandemic was a positive force specifically as it related to almost a forcing function for companies to automate their risk and compliance as well as their governance functions. So many board meetings went online. Just overnight, everything went digital, and I am glad that we were there to help our customers across the line.
Was it recently that Diligent started offering ESG-related solutions, or has this always been an area of focus?
We have been doing it for a long time. On the governance side, which is leadership and gender diversity, we have been really out front with an initiative called Modern Leadership to encourage boards to have more diverse leadership teams, and there’s all sorts of data that shows why that’s a good idea for growth, profitability, risk and a broader mindset.
But then during the pandemic, we picked up a company called Accuvio, which is really a leader in carbon accounting, and they’ve not spun this up during the pandemic. They’ve been doing this for a decade with Tier 1 enterprise customers and really deep implementations where they can look at the carbon footprint across thousands of different sites for companies. They have a deep library of carbon accounting factors and automate the reporting to some of the different frameworks right from the product.
So that was why we looked at the acquisition and said this perfectly matches some of the other initiatives that we have going on the governance side, which is how we added that to the ‘S’ and the ‘G’.
Have you seen a growing demand when it comes to the ‘E’ part of the ESG solution that you offer?
One hundred percent. And I do think that part of that is driven by a lot of companies doing voluntary initiatives. As a result, the regulatory environment is getting far more interesting here, certainly so in the United States. Australia is talking a lot about this; obviously Europe has been pretty far ahead of the game for some time.
All of that creates demand, because customers are coming to us and saying they need help.
The nice thing about our ESG product is we meet the customer where they are. A lot of companies are struggling with where to get started and what to do, and I think we provide a really easy, elegant way for them to get started and let them mature into full scope one, two and three reporting around greenhouse gas emissions.
What is your wider opinion on ESG and where do you see the space heading?
I think it’s here to stay. ESG is really broad, but that said, these themes seem to be here to stay.
I would say Europe has been ahead of the US in this area on the environment side, but the US is sort of waking up to some of these things, with all of these world events that are going on around us – wildfires and natural disasters.
People are understanding that there are transition risks and there are opportunities for companies, and so to be blind to ESG will be ignoring those risks and ignoring those opportunities.
As a woman in fintech, what kind of barriers did you have to face to get to where you are today?
I cannot say it was super easy in the early days, particularly when I was a start-up CEO in the fintech space. I remember it was really difficult just to be taken seriously and have an audience. And I think luckily, things have changed a lot since then.
If you look at the CEO of Citibank, one the largest banks out there, it is a woman. I think opportunities have changed. I would still say there are hurdles, but I think many of them have at least gotten easier. I do feel like it’s gotten materially easier while not discounting that there are still challenges. It’s a little bit of a more level landscape these days.
What’s next in the pipeline for Diligent?
I think we are well on a path to where we are the largest GRC SaaS company in the world. We are looking to really define leadership in this category, to show companies what’s possible when you take data between these different branches of the GRC and the audit risk compliance function and bring them together and expose the right data to the board.
So, it’s really just continuing down this path of leadership and continuing to transition companies to a more modern back office. We’ve got a lot of work to do, and I think we’ll have our hands full for a long time.