Six Global Compliance MisconceptionsAug 15, 2016
For multinational corporations ignorance about global compliance can be costly. It can also open the door for repeated mistakes. Let’s take a moment to separate six global compliance facts from fiction.
Engaging a single service provider like Think Global Compliance (THINK) does not make financial sense
Multinational corporations are often dependent on local law firms or accounting firms for help with local compliance activities. As such, yearly expenses rise due to the hourly rates these professionals charge. The problem is intensified when multinational corporations have a presence in several jurisdictions, engaging multiple service providers, all of them with contrasting extents of service and invoicing schedules. In comparison, economies of scale and a global method to pricing like THINK clients get the full benefit of, generally lowers yearly global compliance expenses by at least a third.
Global compliance cost control isn’t possible
Overall global compliance expenses for multinational corporations might increase every year. But this definitely doesn’t mean global compliance cost control is out of the question. With less and less internal resources to draw on, most multinational corporations rely on external service providers for recurring global compliance activities. But, juggling several service providers is not the most effective approach to global compliance cost control. Working with numerous service providers, it can be difficult to know if the corporation is obtaining long-term value. Putting into action an organized plan and using a single service provider like THINK provides cost clarity, and standardizes global compliance activities.
Buying a legal entity management system is a solution to your global compliance woes
Maintaining a legal entity management system for corporate document maintenance is important. It can offer a sole system and a single platform to store and retrieve content. But obviously a system is only as effective as the content it stores. Internal groups remain accountable for data integrity, as well as updates to subsidiary particulars. A centralized database is an effective tool, but it still warrants subject-matter experts like THINK to efficiently draft and expedite documentation to local company registers.
Legal departments are often not involved enough
Legal departments often tend to be the last ones to learn about corporate decisions made at HQ that need to be correctly actioned in each country. Legal departments must have the ability to focus on higher value activities like M&A activities and IP matters. However, most of the time, legal departments of many multinational corporations are preoccupied by administrative duties that don’t add very much value at all. If an external service provider like THINK becomes accountable for daily global compliance duties this frees up considerable time. It makes legal departments available to present important insights that can underpin corporate strategy and board decisions.
Real time control of global compliance deadlines is not possible
Real time global compliance control is essential in the current corporate climate. Local regulations and legislations can shift quickly, and legal departments require immediate access to compliance data in every jurisdiction. Collaborating with a single global compliance service provider like THINK makes real-time control reality. A centrally managed system like THINK Online lets legal departments maintain and track corporate documentation, allowing timely filings.
The corporate secretarial function is a thing of the past
The corporate secretary has a key role, and must understand the multinational corporation, the business it conducts, the jurisdictions it operates in, and the requirements of important stakeholders. We simply have to observe corporate collapses in the past to know how important compliance is, especially when it comes to establishing and maintaining belief in a corporation. A lack of belief would result in multinational corporations inevitably failing to operate, let alone go global. The corporate secretary’s role is definitely evolving. These days, the secretary is usually the provider of reliable and accurate international corporate information.
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