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Governance in group entities still a potential weak spot

Parent boards must be aware of the financial and reputational damage a problem at a subsidiary can cause and take proactive steps.

BPA Australasia director Chris Bennett (left) and Mak Yuen Teen of the NUS Business School studied 150 of the largest companies listed in Australia, Malaysia and Singapore, and recommended steps to boost governance at the subsidiary level. The report, Governance of Company Groups, was published by CPA Australia.

COMPANIES still have a long way to go to improve corporate governance standards at their subsidiaries, according to governance experts.

Some large multinational corporations have recognised that the governance of group entities or subsidiaries can be a significant problem and have started