Preparing for an IPO is an exciting time for any company. Not only does your personal net worth stand to skyrocket, but the business you worked so hard to build will join a chosen few, making headlines and earning its own ticker on the public markets.

Yet as visions of Bloomberg interviews and vested stock options dance in your head, it's more important than ever to mind the basics. This includes essential corporate governance frameworks and best practices. The path from startup to public company demands governance infrastructure that demonstrates operational maturity to institutional investors and regulatory bodies.

, only 42% of boards are actively engaged in shaping transaction strategy. This represents a significant readiness gap, particularly as economic headwinds and regulatory complexity intensify.

Building IPO-ready governance 12-18 months before your S-1 submission positions your company for success when market windows open. With that in mind, this comprehensive guide will help you 

What preparing for an IPO means and how governance readiness affects valuation

Essential governance structures, including board composition, committee requirements and executive leadership

SEC registration, Sarbanes-Oxley compliance and disclosure requirements

A complete IPO governance readiness checklist with timeline guidance

How AI-powered governance technology accelerates IPO preparation

Preparing for an IPO means building the governance infrastructure, regulatory compliance frameworks and operational controls that public market investors require. This preparation typically begins 12-18 months before S-1 filing and addresses everything from board composition to disclosure controls.

Unlike private company governance, IPO preparation requires satisfying institutional investors, regulatory bodies and public shareholders — all with different expectations. Getting these details right can increase your initial offering price, as investors share confidence in your company's governance sophistication.

Why governance readiness matters for IPO success

Governance gaps discovered during due diligence create the delays and valuation discounts that derail IPO timelines. Companies with weak board structures, incomplete internal controls or underdeveloped risk management face extended S-1 review cycles.

On the other hand, professional governance infrastructure signals operational maturity that supports higher valuations and faster preparation timelines.

"Economic turbulence has put CFOs at the center of the conversation, forcing them to be translators of risk and architects of optionality,” says Nick Araco, CEO of CFO Alliance. “CFOs tell us they are not just slowing deals but actively using this environment to strengthen governance, stress-test assumptions and ensure their organizations will be ready to move quickly when conditions improve."

What governance structures should companies have before going public?

Going public requires a team of legal, financial and regulatory advisors to manage extensive requirements. The structures you put in place signal governance sophistication to institutional investors and establish the oversight framework for public company operations.

In today's business environment with heightened risk and shareholder activism, regulators and investors first examine the board of directors. This group provides strategic oversight and 

 — responsibilities that intensify dramatically for public companies.

Consider the following when building your IPO-ready board:

Directors should represent diverse backgrounds and viewpoints:

 For many pre-IPO companies, this means expanding beyond the leadership team that brought the company to this point.

Board expertise should reflect current challenges:

 Across industries, this includes cybersecurity, sustainability and AI governance. According to the 

, 58% of public company boards now have at least one director with cybersecurity experience.

 In other words, not an employee of the company, like a CEO or CFO. This ensures objectivity and impartiality in oversight and decision-making.

 At least one director should have prior experience with public company audit and capital markets requirements.

For a public company, board committees aren't just a handy way to delegate. Many are required by law, and regulations like the 

 may require a certain proportion of independent directors in their membership.

There are three committees every public board must have:

 oversees financial reporting independent of management. At least one member must qualify as a financial expert under SEC rules.

 manages the executive remuneration structure and administration, ensuring alignment with the company's performance and shareholder expectations.

 (often called "nom/gov") handles new director recruitment, board effectiveness assessments and succession planning.

To the people and institutions investing in a public company and the regulators overseeing it, the people at the top matter a great deal.

Among the CEO's responsibilities are overseeing company expansion, driving profitability and improving share prices, while the CFO manages activities from cash flow and financial planning to compliance and reporting. Make sure that responsibilities are clearly defined for these two critical roles, and that the people holding them have the expertise and skills needed for a public company.

As with the board, it's important to have a 

 for key executives. This builds trust that the company will be well-positioned to obtain top talent and maintain institutional knowledge, and that shareholders will be unaffected by changes in leadership.

 to lead corporate response on legal issues, along with a 

 to ensure that the board has the resources to fulfill its fiduciary duties. In many companies, and especially as board oversight involves an evolving range of regulatory and legal frameworks, these two roles are combined and held by the same person.

What best practices will shareholders and stakeholders expect?

Beyond qualified leadership and committee structures, today's shareholders and regulators expect governance best practices that demonstrate institutional maturity:

: accountability; transparency; ethical behavior; and respect for stakeholder interests, the rule of law, international norms of behavior and human rights.

 that encourage open communication and enable internal problem resolution

 and business judgment rule awareness to ensure comprehensive risk oversight

 to ensure directors remain current on governance practices and industry developments

"Being on a board is about realism and not perfection. Many directors are afraid to say when they don't know something—and this needs to change. Lean into perpetual learning for teams, directors and executives." — Anastassia Lauterbach, Board Director

What IPO requirements and regulations must companies comply with?

The examples and guidelines below reflect requirements for companies going public on U.S. stock exchanges.

Please keep in mind that this is not an exclusive list, and if your company is going public outside the U.S., you'll need to be familiar with the applicable rules and regulations for those exchanges and jurisdictions.

One of the first steps a U.S. company must undertake before going public is filing an S-1 

U.S. Securities and Exchange Commission (SEC)

. Be sure to plan ahead and allocate adequate staffing and time for this task; you'll be required to provide detailed information about your company, including its financials, management and operations.

Financial reporting and internal controls

Public company status brings intensive financial reporting expectations. You'll prepare and disclose audited financial statements conforming to 

 (GAAP). Shareholders expect comprehensive visibility into financial condition and performance.

 can help ensure your financial reporting is accurate, up to date, auditable, and always ready to surface for the board and relevant committees.

While you add more disclosures and reports to your to-do list, you'll also need to know the rules about when to stay quiet.

To prevent unfair promotion or market manipulation during the time leading up to a public offering, pre-IPO companies must strictly limit statements and the release of information about their company from the time they file the IPO until 40 days after the stock starts trading.

Information and events are considered "material" when they could affect your company's financial condition or stock price. They include both positive and negative developments, and your company, as a publicly traded entity, must be prepared to disclose them in a timely manner.

When companies like yours go public on a stock exchange, an underwriting group (often an investment bank) acts as an intermediary. The underwriting agreement outlines the details of this arrangement and the terms and conditions of the IPO, including:

In a publicly traded company, certain stockholders are entitled by law to vote on issues impacting company performance, such as mergers and acquisitions, dividend payouts, new securities and elections of new directors.

You'll need to familiarize yourself with these shareholder voting rights, as well as mechanisms like proxy solicitations, where shareholders request an authorized party to vote on their behalf.

As a public company, you'll need to be conversant in and compliant with rules and reporting requirements related to 

This may include employee education and trading restrictions, an in-house "watchdog," or specialized technology for monitoring operations, flagging potential issues and responding appropriately.

The paperwork doesn't end after your company goes public. Investors and the SEC will expect regular disclosures. Make sure your systems and staffing are equipped to file a Form 10-K each year, Form 10-Q each quarter, and Form 8-K documentation to disclose any material events.

In the United States, the SEC requires publicly traded companies to file 

 before annual and special meetings. This is so shareholders can make informed votes in areas like new director elections, executive compensation and mergers and acquisitions.

A proxy statement can also be a powerful governance tool. Especially when combined with a 

, preparation of these detailed documents can help you identify emerging risks early and prepare for activism or other shareholder pressures.

Going public on a U.S. stock exchange requires 

. This legislation contains stringent requirements for financial reporting, internal control assessments and whistleblower protections.

 CEOs and CFOs must personally certify financial statement accuracy and disclosure control effectiveness

 Annual internal control assessment and external auditor attestation (with Emerging Growth Company exemptions)

 Comprehensive financial disclosures, including off-balance-sheet arrangements

It's a lot to oversee, so you may want to consider 

 to make it easier to get contextualized data and customizable reports from your audit teams.

Another act you'll need to familiarize yourself with, along with the terms "pay for performance" and "say on pay," is 

Provisions within this act require your company to justify its executive compensation, in great detail, before each shareholder meeting.

This can be a highly involved activity consisting of extensive peer and market research, detailed benchmarking, and a specific format, table and metrics to follow for reporting. 

 can help you stay ahead of compensation-related scrutiny and ensure compliance with Dodd-Frank.

One essential area when preparing for an IPO: the listing requirements of the stock exchange where your company's shares will be traded. There may be specific criteria for your company to meet in terms of share price, market capitalization and so forth.

Regulation FD (the SEC's fair disclosure rule)

 prohibits the selective release of information to investment professionals and analysts. In both formal and informal communications, material information about your company must be shared with all investors at the same time.

From a governance standpoint, this means your company will need rigorous compliance and monitoring programs and guidance for key personnel, initiatives your board will need to oversee

Once you've gotten up to speed on federal regulations for compliance, monitoring and disclosures, it's time to drill down further to see what's required at the state, regional and provincial levels.

Will you need to register to sell shares in a specific state? What kind of anti-fraud laws do you need to be aware of?

If your company crosses numerous jurisdictions or has a structure that is particularly complex, specialized 

Anti-money laundering (AML) and Know Your Customer (KYC) regulations

, can also help you keep on top of another complicated and important compliance area: AML and KYC.

It's an investment you might want to consider well before your IPO.

Behind these deceptively simple acronyms lurk a host of regulations related to sanctions lists, fraud, bribery, corruption and more, heightening investor scrutiny in areas like vendor management.

Cybersecurity risk management, strategy, governance, and incident disclosure (SEC)

adopted enhanced cybersecurity disclosure requirements in July 2023

, which fundamentally changed the compliance landscape for public companies.

Preparing for an IPO: Governance essentials for going public

Regulatory change management (RCM) is the systematic process organizations use to identify, assess and implement new or modified regulatory requirements. For growing companies, the stakes are high: A single missed regulation can derail funding rounds, trigger penalties or expose governance gaps that undermine stakeholder confidence.

The challenge is scale. According to Regology's State of 

 survey, 92% of compliance professionals report their roles have become more difficult, with nearly half struggling to keep pace with constant regulatory changes.

Meanwhile, 77% of compliance teams remain stuck using manual processes that increase workload and amplify risks.

In light of the above, this guide provides a practical framework for building or improving your regulatory change management program, whether you're formalizing ad hoc processes for the first time or preparing for 

What regulatory change management is and why it matters for transaction readiness

Key differences between RCM and organizational change management

The problems with manual regulatory tracking processes

A six-step framework for systematic regulatory change management

How AI-powered software transforms compliance operations

Regulatory change management is the ongoing process of monitoring regulatory developments, assessing their impact on business operations and implementing necessary changes to maintain compliance.

Unlike one-time compliance projects, it requires continuous attention as regulations evolve across multiple jurisdictions and industry frameworks.

The scope varies by organization size and complexity. A domestic company tracking a handful of federal requirements faces different challenges than a multinational organization managing overlapping obligations across dozens of jurisdictions.

Regardless of scale, effective RCM creates documented processes that demonstrate compliance maturity to investors, auditors and regulators.

Key components of regulatory change management

Effective regulatory change management programs share several core components:

The ability to identify and capture relevant regulatory developments from government agencies, industry bodies and legal databases across applicable jurisdictions.

A systematic process for evaluating how regulatory changes affect business operations, existing controls and compliance obligations.

Defined processes for routing regulatory changes to appropriate stakeholders, tracking implementation progress and escalating issues when needed.

Mechanisms for updating policies, procedures and controls to reflect new regulatory requirements.

Records demonstrating how the organization identified, assessed and responded to each regulatory change — critical for audits and transaction due diligence.

Ongoing oversight to ensure implemented changes remain effective and to identify emerging regulatory developments.

Why regulatory change management matters today

For companies preparing for transactions, documented regulatory change processes signal governance readiness. According to 

Diligent Institute's Transaction Readiness Report

, 20% of respondents cite regulatory compliance as a top transaction challenge, with public companies more likely to identify it as a concern than private companies.

The business risk environment intensifies this pressure. Diligent and Corporate Board Member's 

 found legal and compliance leaders rating business risk at 7.9 out of 10 — a 36% increase since Q1 2025. Much of this elevation stems from regulatory unpredictability, ongoing tariff decisions and geopolitical volatility.

"The convergence of these factors keeps risk levels high and requires businesses to invest more in proactive compliance, risk management, scenario planning and governance frameworks," says Taras Lytovchenko, chief legal and compliance officer at Trinitex.

 tracking is no longer sufficient. Companies that formalize their regulatory change management processes now position themselves for smoother transactions, fewer compliance surprises and stronger relationships with investors and regulators.

Regulatory change management vs. organizational change management

Though both involve managing change, these disciplines serve different purposes:

Regulatory change management focuses on external compliance requirements: identifying new laws and regulations, assessing their applicability and implementing necessary operational changes to meet legal obligations.

In contrast, organizational change management addresses internal transitions: restructuring, technology implementations, 

 shifts or process improvements that require employee adoption and behavioral change.

RCM often requires organizational change management skills — particularly when implementing new compliance procedures across business units. But the trigger differs: One responds to external regulatory developments while the other addresses internal strategic decisions.

What are the problems with manual regulatory change management processes?

Traditional regulatory management relies on legal teams manually monitoring regulatory websites, subscribing to newsletters and conducting periodic compliance reviews.

This approach creates significant operational challenges:

Manual tracking often discovers regulatory changes weeks or months after publication, leaving insufficient time for impact assessment and implementation planning. By the time teams identify requirements, compliance deadlines may already be pressing.

Monitoring hundreds of regulatory sources across multiple jurisdictions requires dedicated personnel time that most growing companies cannot afford. Staff spend hours on administrative tracking rather than strategic compliance analysis.

Human attention has limits. Some regulations receive attention while others slip through due to competing priorities or resource constraints. This creates compliance gaps that may surface during audits or due diligence.

 that demonstrate compliance decision-making. When regulators or investors ask how the organization responded to a specific regulatory change, incomplete records create credibility problems.

"Organizations leading the way in compliance are leveraging technology and procedural reviews not just to meet regulatory obligations but also to strengthen their overall risk posture," says Kristy Grant-Hart, vice president and head of advisory services for Spark Compliance, a Diligent brand. "When companies prioritize advanced compliance tools and ongoing risk assessments, they're better equipped to anticipate regulatory changes and minimize exposure to emerging risks."

Six steps to effective regulatory change management

This framework provides a systematic approach whether you're building your first formal program or improving existing processes.

Identify the regulatory sources relevant to your business operations, geographic footprint and industry. This includes federal and state regulatory agencies, industry bodies and international requirements for organizations with cross-border operations.

Document monitoring responsibilities and frequencies. Determine who tracks which sources, how often and through what channels. For resource-constrained teams, prioritize high-impact regulatory bodies first, then expand coverage as capacity allows.

Not every regulatory change requires the same response. Develop criteria for evaluating which changes materially affect your operations versus those with minimal relevance.

Consider which business units, processes and systems each regulation touches. Map requirements to existing policies and 

 to identify gaps. This assessment informs resource allocation and implementation timelines.

Regulatory compliance spans functions — legal, operations, finance, IT and HR may all need involvement for a single requirement. Establish clear ownership for each regulatory change, including who leads implementation, who contributes and who approves final compliance.

Additionally, document escalation paths for high-priority changes or those requiring significant resources. Board and executive visibility increases for regulations affecting strategic operations or carrying substantial penalty risk.

Translate regulatory requirements into operational changes: updated policies, modified procedures, new controls or adjusted systems. Create implementation timelines that account for effective dates while allowing adequate testing and training.

Also, coordinate cross-functional implementation where regulations affect multiple departments. A new data privacy requirement, for instance, may require IT system changes, updated employee training and revised customer communications.

Maintain records demonstrating how your organization identified, assessed and implemented each regulatory change. This documentation serves multiple purposes: 

 support, external regulatory examinations and transaction due diligence.

Validate that implemented changes actually achieve compliance through testing, reviews or attestations. Document validation results and any remediation actions taken.

Regulatory change management is ongoing, not a one-time project. As such, you’ll need to:

Establish regular reviews of your monitoring coverage, assessment criteria and implementation effectiveness

Track metrics such as time from regulatory publication to implementation completion and compliance gaps identified during audits

Use these insights to refine your processes. As your organization grows or enters new markets, expand monitoring and assessment capabilities accordingly.

Discover how AI-powered platforms streamline regulatory tracking across financial services, healthcare and technology sectors.

Automate regulatory compliance

How can AI-enabled tools support regulatory change management?

The volume and velocity of regulatory change have outpaced what manual processes can handle. Organizations tracking hundreds of changes annually across different jurisdictions face operational strain that spreadsheets and email monitoring cannot manage sustainably.

AI-powered regulatory change management platforms address these challenges through automation and intelligence capabilities that transform how compliance teams operate.

 Automated systems track regulatory developments 24/7 across multiple jurisdictions, providing real-time alerts when new requirements affect organizational operations. This replaces manual website checking and newsletter scanning with systematic coverage.

 AI-powered tools analyze new regulations for business relevance, identifying specific departments, processes and systems affected by regulatory changes. This accelerates the assessment phase while improving consistency.

 Modern platforms connect new regulatory requirements to existing policies, procedures and controls, identifying gaps before they become violations. This automated gap analysis guides implementation priorities.

 Software automatically documents how regulations were identified, assessed and implemented — creating the compliance evidence that auditors and investors expect to see during examinations and due diligence.

These capabilities shift compliance teams from reactive tracking to proactive management, identifying regulatory changes weeks earlier, reducing manual effort and building the documented processes that transactions and audits demand.

 provides unified GRC capabilities that integrate regulatory change management with enterprise risk assessment, board oversight and policy management — eliminating data silos while streamlining compliance as part of holistic governance oversight.

Within this platform, Diligent Regulatory Compliance Management centralizes compliance data and monitors regulatory changes across multiple jurisdictions, delivering automated alerts and impact analysis.

The AI-powered compliance assistant analyzes regulatory updates, identifies key changes and suggests mitigating controls — enabling teams to respond faster and with greater confidence.

 complements these capabilities by centralizing regulatory requirements, mapping controls to mandates and automating policy review processes that ensure alignment across teams and jurisdictions.

As regulatory complexity continues to accelerate, the gap between organizations using automated compliance tools and those relying on manual processes will only widen.

Companies that invest in regulatory change management infrastructure now build the compliance maturity that supports growth, transactions and long-term stakeholder confidence.

Ready to transform your regulatory change management processes? 

 to see how Diligent delivers the regulatory intelligence and automation your compliance team needs.

How do you identify relevant regulatory changes for your organization?

Start by mapping your regulatory universe: the jurisdictions where you operate, your industry-specific requirements and any cross-border obligations.

Then, establish monitoring for relevant regulatory agencies and industry bodies. Use filtering criteria based on business operations, geographic presence and product or service offerings to prioritize which changes require detailed assessment.

What are the key steps in a regulatory change management process?

Effective regulatory change management follows six core steps: establish monitoring coverage, assess regulatory impact, assign ownership and accountability, plan and implement changes, document and validate compliance and continuously monitor and improve processes.

The specific implementation varies by organization size and regulatory complexity.

How can technology improve regulatory change management efficiency?

Technology platforms automate regulatory monitoring across multiple jurisdictions, provide AI-powered impact assessment, map new requirements to existing controls and maintain comprehensive audit documentation.

These capabilities reduce manual effort while improving coverage consistency and response speed. Organizations using automated systems typically identify regulatory changes weeks or months earlier than manual tracking allows.

What is the difference between regulatory change management and general change management?

Regulatory change management responds to external compliance requirements — new laws, regulations or regulatory guidance that require organizational adaptation. General change management addresses internal transitions such as restructuring, technology implementations or culture initiatives.

While both require stakeholder coordination and implementation planning, the trigger and objectives differ significantly.

See how Diligent helps compliance teams stay ahead of regulatory change. 

Regulatory change management: A step-by-step guide to compliance success

Legal and compliance chiefs are rating the level of risk in the current business environment at 7.9 out of 10, where 1 is Negligible and 10 is Significant. This marks a 16 percent increase from Q1 levels, though the figure has remained relatively flat since Q3—suggesting the risk escalation may be stabilizing.

While the new year often brings a renewed sense of optimism and a resetting of the slate, legal and compliance leaders are ending 2025 with persistent concerns about the risk landscape: The overall sentiment among the general counsel, audit, legal and compliance leaders participating in the Q4 Business Risk Index, conducted by Diligent Institute and Corporate Board Member, points to compounding pressures across economic, regulatory and political realms creating a precarious environment for business.

“These elements are directly related,” said one respondent. “As one risk escalates, the others do, too.”

“In 2025, risk levels didn’t just spike, they settled into an ‘alwayson’ baseline,” says Dottie Schindlinger, Executive Director of the Diligent Institute. “In a world where significantly high risk levels are constant, the GC’s agenda may become increasingly defined by AI and broader tech exposure. 

, predicting heightened regulatory tracking, audits and policy reviews in 2026.”

The most striking finding from the survey is the dominance of technology-related concerns. Sixty percent of respondents cited technology as a risk today, well ahead of any other issue, including the economy (33 percent) and tariffs (23 percent). Legal, compliance and audit leaders view increasingly sophisticated cyber-attacks as a primary threat vector.

“Cyber threats and supply chain instability continue to create pressure, particularly for tech and services companies that depend on stable, secure environments,” said Taras Lytovchenko, chief legal and compliance officer at Trinitex.

“From an IT business perspective, the regulatory uncertainty is the biggest factor, especially around data protection, AI governance and cross-border compliance,” added another respondent. “On top of that, cyber threats and supply-chain instability continue to create pressure.”

“Technology risk is now the connective tissue across the entire risk register,” says Kira Ciccarelli, Senior Manager of Research at the Diligent Institute. “We know that 

boards too are experimenting with new tech like AI tools

 to enhance oversight, yet relatively few organizations are leveraging AI powered dashboards for risk monitoring. Closing that execution gap will separate leaders from laggards.”

While those polled expect most risks to lessen as businesses get more clarity around issues such as trade, regulations and the economy, AI-related risks are the notable exception. The majority continue to cite it as a top risk for their organization in 2026, well ahead of the economy (23 percent) and regulations (19 percent). 

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Preparing for an IPO: Governance essentials for going public

Regulatory change management: A step-by-step guide to compliance success

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