Compliance and beyond
It is crucial for any company to ensure it avoids the risk of penalties, wasted management time and reputational risk that accompany a failure to follow the rules.
These risks may be multiplied where a company has entities located in a variety of jurisdictions, either internationally or within its own country. This issue is reflected by respondents, with 64 percent saying compliance with local laws and regulations is a priority.
The next most frequently cited priorities for entity management are efficiency of corporate structure (61 percent of respondents), ensuring consistent governance across the corporate structure (50 percent), minimizing entity costs (37 percent) and supporting M&A (23 percent). Respondents have the option to name multiple priorities.
That ranking of priorities is broadly the same across different company sizes, though efficiency of corporate structure is more important to mid-cap respondents (74 percent) than compliance with local laws (65 percent). Similarly, efficiency of corporate structure (86 percent) is cited more often than compliance with local laws and regulations (73 percent) by respondents at mega-cap companies.
Among respondents in the US, there are almost identical figures for compliance with local laws and regulations (70 percent) and efficiency of corporate structure (69 percent). In Europe there is more of a distinction between these two priorities (66 percent and 53 percent, respectively).
Respondents in Europe are also most likely to cite ensuring consistent governance across the corporate structure (59 percent).
If respondents are allowed to pick only one main priority, the same ordering is evident but compliance with local laws and regulations takes a stronger lead, being cited by 41 percent. Efficiency of corporate structure comes next (24 percent of respondents) followed by ensuring consistent governance across the corporate structure (18 percent), minimizing entity costs (10 percent) and supporting M&A (4 percent).
