Balancing the Baby and the Bathwater, a Risk-Based Approach to Subsidiary Corporate Governance

Abstract

How should corporate governance apply to subsidiaries of large international organisations? How do directors at the subsidiary level discharge their duties? How often should they meet and what level of involvement should they have in the entity’s financial control and internal risk management? These are not easy questions and there is no one right answer or single governance approach. Further, as is often the case, there are a number of competing interests and practical concerns in play and they all need to be balanced. What this paper seeks to do is outline a risk-based methodology that an in-house counsel or company secretary of a large institution could apply in devising a practical yet robust corporate governance approach to subsidiary entities.