Estimated reading time: 2 mins
When a company operates on a global scale and enjoys bigger profits, it also increases its risk. This risk comes from its compliance and governance practices that need to be fulfilled.
They fulfill this by hiring additional lawyers, risk managers, and compliance officers. Apart from that, global entity management can also be outsourced to a professional firm.
Whatever the case may be, there are always steps you can take to ensure that your risk is reduced and compliance is improved. Here are 4 practical steps you can take to improve this practice in your company.
Centralise Your Data
This is critical information that can’t be afforded to be dealt with haphazardly. You need to have one source where all data is collected and stored.
Your company will have many subsidiaries in different geographical locations and so data needs to be transparent to everyone from one single source.
This will also help you to produce high-quality data and retrieve it in no time to reduce risk.
Communicate Based On Data
Communication channels also need to be optimised so everyone can communicate and collaborate effectively. This is where the importance of an entity management system comes in.
Your company needs to have a proper system in place to centralise data and optimise all processes of the workflow. This will save the time of everyone involved in the business and it will leave less room for error.
Consolidate All Data
This will help you to generate whatever you need to improve your practice. For example, a company makes use of the data to make organisational charts.
This will be done regardless of jurisdiction so the global ownership will be shown. Doing so will guarantee that the hierarchy of the organisation is not tampered with.
Manually making organisational charts is not efficient as it leaves a significant margin of error and can harm your compliance and governance practices.
Find A New Way To Assign Directors And Officers
Your organisation will have to find a new way to approach this too. This is because directors and officers will be assigned to more than one of these entities.
A useful approach for this is to generate a master list. Then you can use that list to assign people in a legal entity as directors and officers for a specific entity. Of course, the roles can have variations across entities; they don’t have to be uniform.
This will save time as it will mean that a person can generate any report they want within a matter of a few minutes rather than days. In the long run, it will have a significant impact on mitigating risk.
A global subsidiary management process is a long one but one that every company operating on a global scale needs to take. You will have to completely change the way your company works to make it better and optimised.
In the long run, the benefits will outweigh the costs and you will have an effective management system in place.
Check out these similar posts:
- Drive Business with Effective Vendor Risk Management
- Auditing Governance
- Best Practices for Compliance Management
- KPIs for Measuring Compliance Effectiveness
- Why Compliance is the Business Buzzword to Watch