The inherent risk in subsidiary governance and how to tackle it

According to a 2021 Osterman Research  study , most enterprises are overconfident and lack the proper visibility to manage subsidiary risk. Subsidiary risk is a growing issue associated with managing businesses across a range of industries, geographies, and jurisdictions. Regulatory requirements are increasingly strict and increasingly disconnected internationally, making it imperative that holding companies have a firm grip on their subsidiaries, particularly their governance, risk, and compliance performance. As companies grow in size, diversity, operations, and markets, the number of subsidiaries and corporate complexity increase. While reasonably comprehensive frameworks of good governance exist, companies face various challenges when it comes to the governance of subsidiaries. The primary challenges are: How to extend and ensure corporate governance processes and policies are spread to the subsidiaries and  What governance structures of the subsidiaries best lend themsel...