Insights

On the board’s agenda

Subsidiary Governance
Governance in a multidimensional environment

For decades, organizations set up subsidiaries to expand their operations, move into new markets or protect themselves against risk. While the business purpose of the subsidiaries was well planned, little attention was often given to their governance, which was often left to evolve organically.

Welcome to the new issue of On the board’s agenda, a publication where we focus on topical issues of importance to directors.

In this issue…

Olivia Kirtley, a non-executive director of U.S. Bancorp, Papa John’s International, and ResCare, Inc., and president of the International Federation of Accountants, Dan Konigsburg, Managing Director, Global Center for Corporate Governance, Deloitte Touche Tohmatsu Limited, and Susan Hwang, partner, Governance, Risk and Regulatory, Deloitte Canada, examine the multidimensional environment of subsidiary governance and highlight some leading practices organizations are taking to better align the governance of parents and their subsidiaries including:

  • Assigning a senior executive directly responsibility for managing the organization’s subsidiaries, overseeing their governance practices, and ensuring they’re aligned with the parent’s requirements so the organization can better manage the risk exposures in its extended ecosystem.
  • Categorizing subsidiaries by their importance to the parent, and tailoring the governance requirements for each category of subsidiary to better focus time and resources where they are needed most.
  • Holding joint meetings, having common directors and other practices to build transparent and accountable relationships between parent boards and subsidiary boards to build collaborative relationships, create synergies and align strategies.
  • Balancing risk oversight and internal control processes between the parent and subsidiary organizations that strengthen the entire organization through an appropriate risk appetite and mitigation processes.

Learn how your organization can strengthen the risk and governance processes of its subsidiaries in this issue of On the board’s agenda.

For additional information and insights please visit our Centre for Corporate Governance.

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