The Drive for a Data-driven Global Subsidiary Services

Data is an omnipresent feature of all our lives. Over the last 30 years, as technological advancement has rapidly increased, so too has our approach to data management and analytics. Put simply, the companies with the ability to utilise data in the most effective way have a significant advantage over their competitors, as data feeds into key decision-making, enhancing the process and allowing businesses to make smarter and more informed decisions.

One does not have to look far to see the evidence of this. This year, nine out of ten of the most valuable companies in the world are data companies or firms whose business model is heavily dependent on data.

Data can create value for companies and their stakeholders in a number of different ways. McKinsey[1] argues that capturing value from data is dependent on the integrity of the entire insights value chain. They categorise the model by: top-line use cases which typically help companies improve customer-facing activities, bottom-line cases which employ data-driven insights to optimise internal process, and in new business models where data-enabled users can move beyond processes and bring value by expanding a company’s portfolio of offers.

Ultimately, data has become a mission critical component of how all firms do business. Forbes[2] statistics on big data show that 79% of executives agree that companies will travel down the path of failure if they choose not to embrace big data. This is because big data, and the analytics it allows, is already having a real world impact on productivity, through; identifying roots causes of failures and issues in real time, re-evaluating risk portfolios quickly and giving companies access to vast stores of information.

The analytics aspect is paramount and will only grow in importance with over 150 trillion gigabytes (150 zettabytes) of information needing analysis by 2025. This is because more than two thirds (69%) of companies have started using big data-driven culture, with more than a quarter (27.9%) already reporting positive results.[3] Those who miss out on this fundamental shift, and more importantly fail to take significant steps to implement data analytics, will surely fall behind.

The challenge for governance professionals:

This reality is no less true for governance professionals. Governance is becoming a core challenge for all multinationals and therefore forward-looking corporations are looking to supercharge their subsidiary governance.

In the wake of COVID-19 the financial and business world has seen its everyday normality turned upside down. Couple this with the ever-growing regulatory complexity faced by governance professionals and we see the pressure General Counsels and secretarial teams are under to adapt to these changes and respond with innovations to governance processes.

For General Counsels, there is also the challenge of demonstrating to internal stakeholders that you are moving with the times, and also being able to highlight that you are doing the best job you can; both in comparison to your peers and your industry as a whole. With regards to the world of global subsidiary governance, companies must have the ability to measure performance (in terms of total tasks, duration, and cost) across individual businesses, industries, jurisdictions and even regions.

In this sphere of ours, we are only now just starting to see the incredible power that data can have in our industry. It is not just a ‘nice-to-have’, it is a necessity.

The challenge for subsidiary governance professionals is clear. Thus far, data has been hard to come by and even where available has been incomplete. Available industry data has tended to be available only from a patchwork of regional 3rd party providers and is therefore non-centralised. Industry wide data points have tended to be survey-driven and thus rarely provide a fully accurate and objective picture of the landscape.

Towards a more data-driven global subsidiary governance sector

To address this challenge, Citco GSGS has, over the course of the last two years, been developing its own proprietary task management system, with the goal of creating a whole new level of oversight and analytics for all our clients’ subsidiary governance workflows. As well as unlocking new value for clients it has also enabled us to begin collating and analysing a wealth of sectoral, regional, and industry-wide data. At Citco GSGS it has been for some time our mission to help redefine the global subsidiary governance industry and part of our commitment to that goal has been to play our part in adding to the communal stock of thought leadership and industry insight.

On which note, we are pleased to announce that we will shortly be sharing key insights derived from our task management system data, launching our first annual report on the complexity of the regulatory environment and the difficulty of managing global entities, looking into data aggregated across over 160 jurisdictions.

Kariem Abdellatif, Head of Citco Global Subsidiary Governance Services
Citco GSGS Focus – Winter 2020/2021