Why Today’s Corporate Secretaries Are More Important Than Ever for Global Expansion

As we wrote in a previous blog, we’re seeing global companies responding to several trends that are influencing global expansion, from an increase in M&A activity to a changing regulatory landscape. These trends are also creating growing pressures that corporate secretaries are uniquely positioned to address. Today’s blog walks you through the challenges that companies face and explains how Corporate Secretarial Services can address them and help companies stay compliant and competitive.

Challenges that global companies are facing today:

1. Growing pressure for good corporate governance from all fronts.

Companies are facing an increasingly active and involved stakeholder base—one who is more concerned with compliance and good governance practices than in the past. Investors, too, are expecting more effective and documented global governance, compliance monitoring and entity management as evidence of responsible stewardship. At the same time, the growth that companies and their stakeholders (including investors) are pursuing leaves many struggling to manage the resulting changes across their global portfolio—everything from ensuring that deadlines are met in the required local format to quickly developing the right benefits packages for jurisdictions in different countries.

Thus, international companies are now, more than ever, becoming more proactive in achieving a more accurate understanding of their global compliance requirements in order to better manage their entities globally and embed these practices into their corporate operating models. With both reputational and regulatory risk on the line, as well as costly penalties for missed deadlines, asset seizure and even personal liability for corporate boards, the risk of non-compliance is simply too great for this not to be a core focus.

Corporate Secretarial Services play a significant role in addressing increasingly complex needs. Internally, companies must handle the management and oversight of their legal entities (particularly those in multiple markets), operational efficiency, and internal reporting mandates. Externally, they must meet requirements to be compliant and to maintain the most appropriate structure in all countries and jurisdictions in which they operate.

2. Global bodies are raising the regulatory bar for foreign companies.

With global expansion a continuing trend, we’re seeing a marked rise in foreign direct investment in emerging markets. With this increasing demand in new markets, global markets are maturing in line with these opportunities. Global bodies (such as the OECD) are also increasingly focused on regulatory issues and are applying more pressure on member states to require that foreign companies comply with principles for good governance.

This focus on compliance and reporting in emerging markets has been one of the most important developments in global governance regulations that we’ve seen in recent years. Specifically, we’ve observed a more significant focus on Environmental, Social and Governance (ESG) reporting in many countries. As a result, many companies are now reassessing their global structures and making significant adjustments to their operations and controls. And, as the European Union (EU) continues to increase regulatory measures for its member countries, company structures are changing as businesses evolve their operating and governance models to stay in compliance.

3. Global expansion is moving into non-traditional jurisdictions, creating new opportunities as well as introducing new complications.

This shift in global regulation may be why we’re seeing so many companies seeking to expand in what used to be considered less traditional jurisdictions—from the Middle East to Africa and China. These countries have laws and regulations that are vastly different from one country or jurisdiction to another. Consider, for example, the need for a company to understand the unique requirements for registrations in each province in China. In the UAE, that same company would need to understand the difference between trade and commercial licenses. And in Saudi Arabia, they’d have to comply with a recent law dictating how to headquarter regional offices.

Cultural norms and linguistic differences add an additional layer of complications. From translations for certifications and notarizations, to legal terminology and even dress codes for government buildings, these tasks all require both in-country knowledge to execute as well as the foresight to plan for them.

Despite the challenges, the outcomes—clear organizational structures, new governance matrixes and increased control and visibility of reporting—do create competitive advantages. From clearer oversight into global operations to a more holistic understanding of structures and interdependencies, better governance and operations can lead to simplification and cost optimisation for today’s well-run global companies. Better yet, these best practices are often crucial for companies entering M&A discussions, attracting new investors, or simply planning to list.

And what better asset to help your company tackle these hurdles than Corporate Secretarial Services?

How Corporate Secretarial Services addresses the challenges of global expansion in today’s stronger regulatory landscape

Today’s corporate secretaries play a key part in corporate governance, legal entity management and navigating complex regulatory landscapes, particularly in companies with a global presence. These days those responsibilities are increasingly valued by a wide range of stakeholder groups, from investors to corporate board and even employees.

For example, tax departments need to understand structures for everything from tax optimisation and double taxation agreements to understanding permanent establishment risk. Risk managers need to assess country risks, understand operational challenges and develop global mitigation strategies. Accountants need to plan money movement, understand banking conditions, and require entity information for statutory reporting, country-by-country reporting (CbCr), and meeting filing deadlines.

The diversity of these examples underscores the pivotal role that Corporate Secretarial Services play in ensuring that today’s global companies have an accurate, holistic overview necessary to maintain good legal entity management while reducing risk and meeting the challenges of global expansion in a changing regulatory landscape.

Our Approach

While there are many service providers who bring large-scale, standardized solutions to global expansion challenges, a governance expert with a tailored approach and real-world expertise will always deliver the right results for your company. In fact, our clients frequently tell us how much they appreciate the fact that HSP has become an essential extension of their internal corporate secretarial and compliance teams, providing global insights while ensuring the good standing of their global entities.

The HSP high-touch, hands-on approach sets us apart and is a cornerstone of the personalized, bespoke solutions we deliver. Contact us today so that we can start delivering your custom solutions.

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