Multinational Company Groups – A Challenge For Compliance Professionals?
This article challenges the widely acknowledged thought that multinational company groups are better equipped to deal with compliance challenges. In this context, we use the term of multinational company group( or preferably the short version“ group”) for a combination of companies that exist in a multitude of jurisdictions and are under common control of an entity, natural person, or several entities and / or natural persons acting in concert.
Authors: Atty. Selim Keki
It is generally believed and probably true that these groups tend to have an increased awareness of legal compliance as well as more resources at their disposal and thereby have more elaborate legal compliance infrastructures in place than usual local single-entity businesses. Their awareness can stem from cultural predispositions, such as originating from jurisdictions with high sensitivity. It can also have been caused by purely practical necessities, such as their business models, dealings with business partners, relevant regulations or geographic footprints being exposed to a high degree of compliance risks. One certain reason is that compliance incidents occurring within them can fulfil the so-called nexus for US, UK or other antibribery authorities to intervene. Aware of that, they employ compliance professionals that may be dedicated( specialized) or have dual roles as lawyers and compliance officers.
25
Organizational efficiencies as the root cause of difficulties? These cross-border operating groups typically run several businesses and maintain distinctly organized support functions( such as legal, finance, HR and IT). Increased specialization has seen these businesses and support functions being more and more often organized to extend across international borders: In these situations, solid reporting lines are woven only inside these businesses or support groups, without regard for national borders and the locations of the entities by which the members of these businesses and support functions are employed. These businesses or support groups would then be connected at their top-levels to the