Increased merger and acquisition activity is making subsidiaries a more common part of the corporate structure in many industries. While growth increases revenues, market share and global footprints, it also brings governance complications with additional, complex domestic and international regulations to keep abreast of and comply with.
Governance, risk and compliance issues to manage
Subsidiary management can rapidly become a real issue. Meeting minimum corporate requirements for just one foreign subsidiary can take many hours each year. Consider the burden when this is multiplied across a growing global organisation with numerous other governance, risk and compliance issues to manage. Think about each of these subsidiaries operating in a silo, with all the collaboration and document exchange required to get everyone on the same page. And the more complex the group structure, the greater the regulatory, legal and compliance burdens.
Finally, consider how legal and administrative staff, resources and budgets have been consistently shrinking in many industries despite rising regulatory requirements. Subsidiary management suddenly becomes a drain on productivity – and an area of risk as corporate governance failings are often at subsidiary level.
How a company secretary can help
Bridgehouse Company Secretaries’ legal experts have extensive experience of handling governance and compliance issues for groups with a number of subsidiary companies in many different international jurisdictions.
Effective subsidiary management can help to protect shareholder value and guard against reputational damage and financial penalties arising from compliance failures.
Talk to us about how we can help with subsidiary management.