Tips and Answers to Your Questions
The Forms of Strategic Restructuring

	Ask a Question about Strategic Restructuring Your Question: Your Name: Your E-Mail Address:

Can an organization be part of a parent /subsidiary relationsip with out having the parent being in control of it's board?

The parent organization, as the sole member of the subsidiary organization, elect's the subsidiary's board at the latter's annual meeting. When electing the board, the parent has, essentially, four choices:

1. It may elect it's own entire board as the subsidiary board.
2. It may elect a subset of its board to serve as the subsidiary's board if it wishes the subsidiary to have a smaller board.
3. It may choose a group of non-board members - for example, it senior managers - to serve as the subsidiary's board.
4. It may elect some representatives by either method 2 or 3 above, and then allow that core board to freely choose some number of additional board members. (In this case, it is important that every board member, however recruited, understands that the parent organization's board ultimately elects him or her.)