Group Governance

For subsidiary boards, the challenge is to balance the interests and obligations of their company with that of the group. Subsidiaries will often have a different set of stakeholders to whom they are accountable and, depending on their sector or where they are based, may be subject to different regulatory requirements to those of the parent and other subsidiaries.

For parent boards, the challenge is to ensure that all subsidiaries are acting in a way that is consistent with the group strategy, that the synergies between the different parts of the group are being maximized, that there is a shared culture and set of values and that risks are being managed effectively throughout the group.

Operationalizing these objectives presents further challenges for the management of both companies.

The appropriate extent of integration and degree of subsidiarity, and the allocation of responsibilities, will depend on the group’s particular circumstances. However, in all cases it is important to ensure that there is clarity about the group governance framework and where accountability rests, strategic and cultural alignment, effective risk management and adequate information flows between the subsidiary and parent.

The Morrow Sodali Board & Governance team offers a range of services to help the boards and management of groups and their subsidiaries. These include:

• Group Governance Assessment: Reviewing the client’s overall approach to group governance;
• Group Governance Policy: Helping the client to develop a holistic framework that sets out general governance principles, establishes common standards for all group entities, and outlines the responsibilities and relationship between businesses and functions across the group; and
• Group Governance Implementation: Assisting parent and subsidiary boards with the preparation of policies and procedures and embedding them through workshops and training.

For more information on our group governance services, please contact us: boardgovernance@morrowsodali.com.