Legal entity management (LEM), or subsidiary governance, includes governance systems and practices that cover various facets of an organisation.
ACC and Deloitte have released the first edition of An Inside Look at Legal Entity Management Practices, which intends to improve the understanding of existing team structures, procedures, and practices that organisations have implemented to manage complex compliance and regulatory obligations. The report demonstrates that while many organisations have subsidiaries, most do not have solid and consistent policies and practices in place to manage their governance. With significant risk and tax implications, often in multiple jurisdictions, ensuring a solid LEM function is a critical component for organisations to manage their risk. Given the current landscape of heightened compliance and reputational risks that organisations face, effective legal entity management has become a focal point.