The Global Compliance Calendar – Taking Control of Your Annual Obligations

General counsels, in-house corporate secretarial and legal teams are constantly under pressure to deliver a successful global compliance strategy. Determining the most urgent actions can make governance of large multi-nationals’ subsidiary portfolios a seriously challenging exercise.

Business events cause changes that need to be implemented in the organisational charts, management structures, officially registered data and corporate files. In addition to event driven tasks, there is a lot of regularly recurring work that needs to be done for each subsidiary. Based on statistics from thousands of Citco Global Subsidiary Governance Services (GSGS) clients’ entities in approximately 160 jurisdictions, the average number of annual obligations per year, is three per subsidiary. Common annual obligations include: shareholders’ approval of financial statements, filing of financial statements with the commercial registries, directors’ approval of financial statements and filing of annual returns. However, for instance in Argentina, India, Spain, Egypt, Indonesia and many others, significantly more actions are required to be completed on a regular basis, each year.

Furthermore, the list of annual obligations and their deadlines are dynamic because legal regulation continues to expand globally. For example, legislators in many countries are now implementing new regulations with regards to the disclosure of the Ultimate Beneficial Owner (UBO). Thus, for many entities, a new annual obligation which we call “Review of the UBO file” becomes applicable (see “Citco’s Global Solution for Maintenance of UBO registers”). In addition, deadlines can often change due to legislation changes or after major events in the companies’ life-cycle (e.g. the financial year-end changes after a merger).

Missing the deadline of corporate annual obligations can result in negative consequences. These include: delays for other filings, incorrect information available for third parties, reputational risk, fines and even initiation of the closure of subsidiaries by the authorities. Thus, transparent calendaring and planning are essential in order to keep control over a global portfolio.

Meeting regulatory complexity head on

Citco GSGS’s Compliance Calendar is a specifically designed, transparent monitoring tool, with up-to-date information on annual corporate secretarial obligations, with general rules and exceptions per company located within the Citco GSGS task management system. It provides a schedule for the full year, with the specification of the work to be done and accompanying deadlines, increasing efficiency and visibility across the organisation and ensuring that annual obligations do not take corporations by surprise.

This was apparent in 2020, when the deadlines in the global compliance calendars were significantly adjusted due to COVID-19, with 75 countries announcing that the legal deadlines for the annual obligations had been extended. The Western Union Corporate Governance team highlighted that, “The annual calendar is very helpful. It has been especially useful during the pandemic when due dates may have been extended.”

Citco GSGS clients also stress that the calendar helps in planning leave as well as providing full visibility on the peak periods in the corporate governance of subsidiaries. A large telecommunications corporation (Global 2000) engaged Citco GSGS for subsidiary governance more than 10 years ago and each year, have received an updated, customised compliance calendar. Its representative noted that, “There are, in my view two aspects: ability to plan my work and absences based on the upcoming due dates and secondly, having confidence that things get done as they should.”

The annual compliance calendar is created upfront, and is updated dynamically during the year, showing the status of each annual obligation in the progress report. It provides transparency on which items are critical, which need immediate attention and which items are upcoming. The senior legal specialist of a large pharmaceutical company (Global 2000) shared her experience of using the global compliance calendar, highlighting that, “We received a tailored yearly financial obligations report which we refer to almost daily. The calendar is also very useful and allows us to support local markets as well in working towards obligation deadlines”.

In addition to real-time updates on the status, the information is used strategically to provide analysis for efficiency improvements moving forward. The statistics of any overdue annual obligations also indicate the most problematic affiliates and subsequently specifies where their focus should be for the upcoming year. 

The Global Compliance Calendar is combined with Citco GSGS client servicing teams’ ‘white glove’ service model. With the help of the Global Compliance Calendar functionality, the Citco GSGS client servicing teams and in-house teams know what is in the pipeline and act in partnership to complete these actions items. Intelligent planning, transparency and efficient processes of the annual corporate secretarial obligations are the key ingredients of a successful global compliance strategy. Citco GSGS compliance calendar is a unique and easy to navigate tool, making group-wide entity information easily accessible to all project members and ensures corporate control through transparency.

Jurate Kisieliene, Client Servicing Manager, Citco Global Subsidiary Governance Services
Citco GSGS Focus - Winter 2020/2021