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 Subsidiary Governance:
What's it all about?
Today's Corporate Secretary/General Counsel is becoming a key
strategic player who is evolving into a “Chief Governance Officer.” The
responsibilities extend beyond keeping by-laws, minutes, and corporate
records into critical advisor on corporate decisions.
The role may include creating essential reports, producing
organizational charts, and quickly accessing information requested by
senior management, boards of directors, finance and/or tax departments,
auditors, and ultimately shareholders.
In the wake of Enron and WorldCom, the inner workings of corporate
America have become highly scrutinized. Companies with multiple
subsidiaries are being analyzed to ensure entities aren't just places
to hide financial gains. As tougher regulations (like Sarbanes-Oxley)
emerge, so does new disclosure requirements including access to
information below the parent company. Officers and boards of directors
are now accountable for corporate activities including what is
happening in their subsidiaries.
To gain control, organizations need to establish a system of
“subsidiary governance” — a set of corporate practices and ethics that
start at the top of the parent company and apply down through the
organization's entities worldwide.
Ensuring consistent subsidiary governance throughout an enterprise
requires powerful technology. That's where the World Records®
application comes in. It covers the full cycle of events from adding or
dissolving entities to appointing or resigning directors and officers.
The system helps manage the corporate data that drives a company's
ability to keep up with the legal requirements to run a business that
may have hundreds or thousands of entities around the globe. It
monitors accuracy to protect the senior executives and board members
who are ultimately accountable for the integrity of the subsidiary
information.
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