Global Subsidiary Governance Services Focus - Summer 2020
As we issue the first GSGS Focus Newsletter under lockdown, it is hard to think of a time when General Counsels and corporate secretarial teams have been under more pressure. Covid-19 has left multinational companies around the world struggling to maintain the full compliance of their international subsidiary portfolios. In fact, if it were not already clear enough, this new reality is bringing into even sharper focus the need for firms to ensure the robustness of their subsidiary governance operating and control models.
As the pace of regulatory change continues to grow, a robust subsidiary governance framework is vital. This is all the more important in the current climate, as regulatory developments wait for no one, as we highlight in our article in this newsletter on new UBO requirements which many firms are still attempting to get to grips with.
Not only has Covid-19 had a material impact on the way our clients operate, it has also accelerated important longer term trends for our industry. Obviously, the situation so far in 2020 has had an enormous effect on the normal functioning of registry agencies, government bodies and local service providers across the globe, with many countries swiftly introducing emergency measures relating to Board and Shareholders Meetings as well. Keeping track of such practical and legal developments has presented a unique challenge for departments tasked with subsidiary governance. Even more so given the challenges of working from home.
Transparency in particular was a critical issue in the early days of the outbreak, making it difficult to effectively manage the relevant processes and workstreams. Some firms ran the risk of becoming severely compromised. Ensuring effective visibility at the central level of local operations around the world, always crucial, became much more difficult in a work from home situation. We give an overview of how Covid-19 has impacted corporate governance in this newsletter.
Covid-19 has also expedited longer terms trends that we have been pointing to for a number of years. In particular, we have seen a considerable growth in corporate governance teams using technology to improve their workflows. A recent report published by LexisNexis last year found that 85% of General Counsels have introduced multiple technology-enabled insight systems. A further 60% believe that technology will improve accuracy over the next five years. We touch on one aspect of this trend in our article on the rise to prominence of e-signature systems.
The opportunity afforded by technological advancements has been a burning issue for Citco GSGS for a number of years now. In Q4 2018, we began the phased internal launch of our task management system. In April this year we reached a momentous milestone with the wider rollout, enabling corporate secretarial teams to gain accurate, real time insights into their global governance workflows for the first time ever. In light of the current situation, it also crucially provides access to their data 24/7 from any location through a dedicated portal. In this newsletter, Chris Butler outlines how the task management system will begin to shift the paradigm for our clients. As ever, please do reach out to us if you would like to experience a demo of the task management system. We would also be delighted to receive your feedback on your experience of our new offering. As part of our wider drive to keep increasing the transparency and visibility we are able to share that we have also taken steps to offer rapid response updates on regulatory changes that may affect your businesses governance operations.
At this challenging time, when many governing institutions are having to take emergency measures, the ability to share information swiftly is paramount. For this reason we have decided to share the most relevant of these with the wider General Counsel and Subsidiary Governance communities through a dedicated Twitter account. If you would like access to these regulatory updates, as well as our longer form thought leadership, I would invite you to follow @CitcoInsights.
In closing, please allow me to express my gratitude to our clients, our Business Partners, and indeed, our staff for continuing to operate as normal in what have been, for many, trying times. The swift adoption of Business Continuity Plans and the shift to home working have been executed with a flexibility and resilience that is a source of great pride and is a reason to look forward with confidence to the further evolution of the Global Subsidiary Governance industry.
Kariem Abdellatif, Head of Citco Global Subsidiary Governance Services
Citco GSGS Focus – Summer 2020