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Deloitte Atlanta office. Photo: John Disney/ALM

As organizations expand their operations, many do so by creating or acquiring legal entities to operate in new markets or different jurisdictions, to protect the parent organization against risks, and to facilitate the way it manages its local and global operations. With this expansion, governance of subsidiaries has often evolved organically. Furthermore, entities that are organized by division or region may have found that some governance practices operate in silos, with little consideration for the extended organization.

Under company law in many jurisdictions, a board has a fiduciary duty to act in the best interests of its organization. However, for organizations that are either parents or subsidiaries of other entities, fulfilling that responsibility is often a complex process.

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