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Feb 13, 2024

How to keep track of organizations in a time of global growth and regulatory dynamics

Governance Intelligence Webinar dives into complicated world of entity management

How can governance professionals keep track of an increasingly complex organization amid rapid expansion, acquisitions and other transactions?

This was the focus of a recent Governance Intelligence Webinar titled ‘How to navigate global growth, regulatory dynamics and professional partnerships’, held in association with Athennian.

A panel of experienced professionals discussed the challenges of global expansion, whether through entering a new jurisdiction or by expanding your organization’s presence via its existing subsidiaries.

Gregg Mazzetti, senior director of global governance at Salesforce, was well placed to discuss these challenges after his company had made some radical strides. ‘We recently faced the challenges of expanding into three countries that were radically different – Indonesia, Chile and the UAE – where we hadn’t been before and at almost the same time,’ he explained. ‘There was a huge project team that worked on it for 18 months.’

In terms of entity management, it was quite an undertaking. ‘A key component is looking at who is coming on board from the acquired company in that country, what role they are going to play and for how long,’ Mazzetti said. ‘We are more intimately involved in that as each situation is radically different for those acquired entities.’

The same rang true for Kari Endries, assistant secretary and managing counsel at Chevron Corporation. Her approach is more flexible, depending on jurisdiction, as each has different governance requirements – for example, Dutch subsidiaries have specific requirements around board gender compositions.

‘We may want to look for a local law firm to assist us or, if it’s just governance work, another service provider to help,’ she said. ‘We also partner very well with different departments. Tax, for example, may have different requirements than compliance or raise different issues.’

Looking across the companies she worked with, Rosy Lopez Gross, senior industry consultant for global operations at Athennian, recommended having a single ‘country owner’ or ‘team owner’ for entity management and market expansion, someone who can be the key contact for service providers to manage that information exchange.

She and Endries agreed it was important to work with vendors that had a good grip of local regulations and markets rather than relying on a ‘one-size fits all’ approach.

‘Consistency is key’ was a message passed on by all the panelists. Endries said her firm tries to maintain consistency throughout Chevron’s worldwide operations as much as possible, particularly when it comes to training and onboarding Chevron’s directors.

‘We have a sense of what our governance will look like everywhere, but we do train our officers and directors globally every two years,’ she explained. ‘There’s also a need to speak about global issues – but I feel like our US governance practices are global best practices, which we can extend where necessary.’

Entity management

Emerging regulations
Discussion then turned to the topic of where responsibilities lie for informing the company about emerging regulations in new or expanded locations. A poll of the webinar audience found 37 percent saying their local governance teams took on this burden, while 22 percent said it was either the general counsel or corporate secretary, and a further 22 percent said it was down to an external counsel or law firm.

Endries said she relies on local lawyers to keep her up to date, and that she collaborates closely with internal departments to pass on those learnings. ‘We have added a checkbox in our entity management database so we can see which companies need to report,’ she added.

Mazzetti said the picture was more complicated at his firm and, while he and his team marked the first point of contact for regulatory concerns, discovering where responsibilities lay could take longer to determine. But using channels on the messaging platform Slack helps to speed up that communication, as does a series of regular check-ins with an external law firm, he added. 

‘Without evangelizing about Slack, it’s completely transformed our company,’ Mazzetti said, adding that having a central platform for entity management as a ‘source of truth’ was critical.

All three panelists agreed that finding out who your partners were – however they were organized – before reaching out and maintaining those relationships was crucial to successful entity management.

‘It’s always go, go, go, and there’s very little time to self-reflect on what can make your work easier,’ said Lopez Gross. ‘So take the time to look around to see what is out there to help you become proactively compliant instead of reactive, have better communication and work better with your team.’