With reporting deadlines approaching fast, the end of the year is often a busy time for multinationals. It’s also the best time for them to take a closer look at their subsidiary governance, including undertaking a thorough assessment and a health check of their global corporate secretarial (CoSec) program. Of course, having a vibrant CoSec program is crucial when it comes to corporate governance, entity management, compliance, and risk mitigation.
More than that, the list of compliance requirements is burgeoning year after year. From Profit Shifting and Anti-Money Laundering (AML) to Base Erosion, Beneficial Owner Registration (UBO), and the Foreign Account Tax Compliance Act (FATCA), there’s a myriad of international compliance rules to meet and adhere to. In fact, there are plenty of new reports and new regulations that multinationals must submit to both central and local authorities.
How can multinationals keep up with all these deadlines, reports, and compliance issues? In order to know if they are in good standing, these organizations have to review their CoSec programs yearly. It’s part of corporate governance best practice and an excellent way to end the year on a high note. After all, non-compliance can severely damage a company’s reputation, not to mention the grave financial consequences.
No matter how you look at it, conducting entity status check is a no-brainer for forward-thinking multinationals. And the end of the year is ideal because you have enough information to run an efficient CoSec health check. Which begs the question: what are the vital indicators that your entity is likely to run to non-compliance?
The following three are surefire signs that you need to undertake a re-examination of your global corporate secretarial program.
You Are Being Fined for Non-Compliance
If a multinational is frequently failing to satisfy particular compliance requirements and receiving fines as a consequence, the chances are that it’s not in good standing. From a compliance perspective, it’s high time you rethink and reform your CoSec program and opt for a more effective approach.
You are Always in Trouble with Authorities
If local or central authorities often come knocking on your door, the writing is on the wall. It’s a routine, and it shouldn’t come as a huge surprise to most multinationals. But, if they are more frequent than before, there’s a reason to worry. You need to overhaul your compliance regime to get the authorities off your back.
Company Accounts are Being Filed Late or Incorrectly
It’s quite common for accounts to be filed late. However, if there is an unusually high level of discrepancies and late filing, your paperwork might be chronically incorrectly. A well-executed entity status health check can do the trick.