Ensuring the appropriate governance of subsidiaries

SUBSIDIARY companies are a fact of life for corporations as they expand their scope, operations and geographical coverage.

Subsidiaries are separate legal entities, created for good business reasons such as limiting the risk and exposure of the parent organisation, taking advantage of tax incentives, and facilitating the management of the business at the local or regional level.

By nature of being separate legal entities, subsidiary companies have their own boards and structure. This adds another layer of governance and management to a group corporate structure.