Balancing the Baby and the Bathwater, a Risk-Based Approach to Subsidiary Corporate Governance

James Kruger, Executive Director, Global Head of Legal Macquarie Securities Group, Macquarie Securities Group

How should corporate governance apply to subsidiaries of large international organisations? How do directors at the subsidiary level discharge their duties? How often should they meet and what level of involvement should they have in the entity’s financial control and internal risk management? These are not easy questions and there is no one right answer or single governance approach. Further, as is often the case, there are a number of competing interests and practical concerns in play and they all need to be balanced. What this paper seeks to do is outline a risk-based methodology that an in-house counsel or company secretary of a large institution could apply in devising a practical yet robust corporate governance approach to subsidiary entities.

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Hong Kong Corporate Governance Banking & Finance February 2012 Vol. 5, No. 18, Winter 2012

James Kruger

James Kruger, Executive Director, Global Head of Legal, Macquarie Securities Group, Hong Kong • Global Head of Legal, Macquarie Securities Group • Integrity Officer (Asia), Macquarie Group • Macquarie Securities Group Senior Management Committee member • Extensive pan-Asian experience in finance legal, tax and legal entity structuring with a focus on Equity Markets, M&A, derivatives and structured product, broker-dealer regulatory risk management, and corporate governance • Based in Hong Kong for last 6 years

Macquarie Securities Group

Macquarie Group is a global provider of banking, financial, advisory, investment and funds management services. Macquarie’s main business focus is making returns by providing a diversified range of services to clients. Macquarie acts on behalf of institutional, corporate and retail clients and counterparties around the world. Founded in 1969, Macquarie employs more than 15,000 people in over 28 countries. At 30 September 2011, Macquarie had assets under management of $A327 billion.

Hong Kong Corporate Governance Banking & Finance February 2012 Vol. 5, No. 18, Winter 2012