Energy companies are becoming increasingly concerned about the risk of fines and negative investor sentiment when it comes to overseeing the governance and compliance of their international group structures, according to new research from Ocorian, the specialist global provider of compliance services to corporates.
Of the companies surveyed: third party service providers were used to manage over half (54%) of the entities in their corporate structures with the rest managing them inhouse, however, concerns about entity management and governance are rising. Around 70% questioned say they are worried about the investor impact which might arise from entity management issues whilst 67% also worry about the risk of fines.
Ocorian, which supports 15,000-plus corporate entities across its global network, says the increased attention on net zero targets worldwide has led to a growing focus on ESG, particularly with energy companies and is urging them to take a proactive stance.
Key issues to address include establishing a strong framework around global entity compliance, keeping up to date with regulatory changes worldwide and maintaining a lean corporate structure as dormant entities are not only expensive to maintain but also expose companies to unnecessary regulatory risk.
Commenting on this, Ocorian head of business development for corporate services, Chris Mayfield, said: “Energy companies should develop clear, comprehensive policies around ESG and take a proactive approach to corporate governance if they want to remain competitive and attract future investment.
“By demonstrating a strong commitment to compliance and reporting regulations, companies can build trust with stakeholders and investors, mitigate regulatory risk and put greater focus into growing their business.”