Global subsidiary management is becoming more complex—and technology, reporting, and talent are high on every corporate secretary’s agenda.
Around the world, corporate secretaries, general counsels (GCs), and entity compliance teams are under strain.
Our 2023 General Counsel Global Barometer is predominantly U.S.-focused, but the trends it reveals are universal. GC teams are having to do more with less in an increasingly complex global regulatory environment.
Certainly, European firms are facing similar challenges to their U.S. counterparts. They’re looking to expand internationally, but worry about compliance challenges in new jurisdictions—and the associated risks of reputation damage.
This much is clear from the conversations we’ve had at recent industry events, including those hosted by the Corporate Legal Operations Consortium (CLOC), the Society for Corporate Governance (SCG), and the Corporate Governance Institute (CGI).
In this article we’ll look at three hot talking points in global compliance around the world, and the challenges and opportunities they present.
Technology trends in global compliance
In our survey for the report, implementing new technology and upgrading existing systems were two of the top three ambitions of in-house legal teams in 2023.
Hard-pressed GCs see better technology and increased automation as a way to free up teams for more complex tasks and help ensure entities remain compliant. Nearly two thirds (66%) said they wanted to implement new technology in 2023.
Data management drives quality in compliance, as it does in so many other areas. A comprehensive, top-tier entity management solution should automatically generate global compliance calendars for reporting and filing obligations, and send emails alerting teams to forthcoming deadlines. It should automate the uploading of documents and monitor your entire entity portfolio for changes that may affect legal standing.
CSC Entity ManagementSM, a proprietary award-winning solution, does all that and more, and is fully integrated with our Global Subsidiary Management services. It allows for consistent and accurate data management across your portfolio.
The growing burden of reporting
Reporting and transparency regulations are heading in one direction only. The onus is on corporate legal teams to keep track of an expanding global web of rules to ensure compliance of entities in every jurisdiction. That’s a tough ask, and the penalties for failing to do so can be severe.
Regulators in different jurisdictions talk to each other. They share data on non-compliance. A misstep in one region may affect an organization’s ability to do business smoothly in another. A non-compliance issue can also create an additional headache for legal teams, who may be asked to provide extra documentation and details on internal procedures.
It’s no surprise that in our 2023 Global Counsel Barometer survey reputation damage was the biggest risk cited by GCs for failing to comply with local rules. Well over half (58%) worry about this outcome.
Our survey also found that concerns around jurisdiction administration, regulation, and governance differences were far more pronounced among businesses managing entity issues entirely in house than those who outsourced at least some of the responsibility to third party providers.
Using a third party to integrate compliance technology in a holistic global entity management service is one solution. It takes pressure off internal teams, while ensuring complex networks of global entities always remain in good legal standing.
A local and global talent crunch
The struggle to recruit and retain talent adds to the stress on in-house GCs. Many teams were slimmed down during the COVID-19 pandemic and many have yet to recover. Recruiting the right staff, at the right price, in the right locations has become a challenge for many corporate departments—and legal teams are no exception.
Staff turnover can jeopardize business continuity, especially when valuable institutional knowledge is lost at the same time. And even if your central team is well manned, getting the local talent you need in multiple global jurisdictions can be difficult and time consuming.
One answer is outsourcing. Keep your specialized in-house teams lean and pass the global recruitment and retention strain to CSC specialists. A global provider can ensure local coverage in every jurisdiction. It also gives you the ability to scale talent requirements up and down as workloads demand, ensuring consistency across jurisdictions and time zones.
How CSC makes a difference
Our Global Subsidiary Management Team provides a full suite of Corporate Secretary services and is experienced in maintaining entities within global portfolios in more than 140 jurisdictions.
CSC Entity Management software provides industry leading entity data management. Our powerful tech-enabled approach and state-of-the-art reporting tools ensure compliance in multiple jurisdictions.
Our experts have many years of experience in global subsidiary management. Our coordinated approach and integrated processes mean you only have to deal with one single point of contact, supported by expert in-country resources.
For the complete picture, download the General Counsel Global Barometer 2023.