‘Going Rogue Overseas’ – Tops Tips for Multinationals with Overseas Managers
For any multinational employer, finding and retaining senior talent in their overseas operations is often key to the success of those operations and the group itself. However, all too often the long-distance relationship with senior managers overseas – like so many other long-distance relationships – can rapidly deteriorate and ultimately break down. This is often due to poor communication and lack of proper engagement, causing damage and chaos in that overseas business and possibly also the group.
While the reasons for a breakdown in the relationship can be varied, there are certain core themes which we tend to come across time and again based on our experiences of acting on both sides of the table – for the multinational, and also for the “rogue” overseas executive. Spotting the warning signs, and dealing with them early, can in many cases help to avoid the disintegration of the working relationship and ensure that the local entity can stay focussed, remain profitable and in growth mode. It can also help avoid lengthy, time-consuming and expensive potential litigation and harm to the reputation and brand of the multi-national.
Things To Watch Out For
In our experience, manager behaviours which should set alarm bells ringing and prompt an early review, include by way of example the following:
Operating in a Silo
Becoming more remote and unavailable
Communication breakdown or distortion
Personal interests and conflicts
Being resistant or selective with local application of global corporate policies and codes or group strategy
Preventing or limiting parent oversight
Difficulty retaining good staff
What to do next
When issues such as those set out above are raised with local overseas managers they can be met with anger and resistance, particularly if he or she has been left to their own devices for some time in the period leading up to this, and may not see the concerns as being valid.
In our experience, it is not uncommon for overseas managers to seek to raise whistleblowing or discrimination concerns in response to criticism raised against them or when the relationship with the parent breaks down.
These claims attract unlimited financial awards in the employment tribunal. They can also be difficult and expensive to defend and are an unwelcome distraction from running your business.
When an overseas manager raises these types of concerns there may be the need for a formal investigation followed by a possible grievance process. If disciplinary proceedings are also ongoing, these various processes have to be carefully managed and co-ordinated to try and minimise the risk of a successful claim against the business.
The further difficulty for any parent company when raising criticism with an overseas manager in a senior role is also the decision of what to do about the day to day running of the business. Is the manager to carry on with their duties, should they be suspended whilst you carry out an investigation or are they simply to be dismissed and possibly sent on garden leave, with any potential negotiations to follow thereafter?
You will have to consider how the manager is likely to react to any intervention by the parent company and what will happen if they refuse to engage or even actively try to disrupt the business. The tactical approach to take here will vary depending on the facts of each case and an early assessment of the legal and business risk; local legal advice should be sought when considering the right strategic approach.
Top Tips to Avoid a Rogue Overseas Manager
We set out below our top tips for reducing the risk as far as possible of the senior management of an overseas subsidiary ‘going rogue’, which include (amongst others) the following:
Running a profitable multinational business requires the attention of those leading the business and its strategic direction to remain focussed on profits and growth. Dealing with concerns over local senior management is invariably a drain on time and resources and can be disruptive to the business and client relationships.
Keeping an eye to the warning signals set out above and introducing some of the suggested remedial management actions will go some way towards either avoiding future problems with overseas managers or at the very least spotting them early. This then allows you to deal with these before they impact on growth and profitability (with proper succession planning if necessary) and with hopefully minimum disruption to the overseas and group businesses.
For more information on CM Murray LLP click here
Follow CM Murray LLP on Twitter: @CMMurrayLLP