Each of these entities requires a board of directors. How do you choose these directors?

A self-imposed hurdle is often a lack clear policies or screening processes for selecting subsidiary directors.

Yet these are crucial roles. Not only do directors carry out the company’s policy across the globe, they also bear personal liability in relation to their role in many jurisdictions.

Here a few do’s and dont’s:

Have a clear policy

Don’t select directors randomly or simply because they happen to be there, e.g. in an operational role.

Select individuals with a good understanding of a director’s role

Directors should understand the role and responsibilities associated with the role. This may come from their initial training (e.g. a legal or accounting background), specific training (e.g. director courses) and/or professional experience.

Train your directors

Regardless of their background, they will need guidance on what’s expected from them, including their role in implementing the company’s global corporate governance policies and furthering its goals. Training should also cover board meetings and drafting of minutes to avoid sharing too little or too much in documents filed with local company registrars.

Above all, global corporations should not leave the subsidiary director selection process to chance.

Not sure where to start? We can help you design and implement a subsidiary director program – contact us for more information.