Hubashisan offers tested and diligence-backed solutions — tailored to your enterprise — for the implementation of contracting infrastructure which is hardened to address the challenges of third party and intra-company services in dynamic regulatory and corporate finance environments.
Services
Transition and Integration Solutions
At Hubashisan, we understand that the closing of your corporate finance transaction – whether it be your divestiture as a seller, your acquisition as a buyer, your spin-out of a former division, or the corporate reorganization of your enterprise – is not merely the culmination of extensive work on the deal structure. It’s the midpoint of a process of operational and contractual diligence and restructuring which is critical to both parties in order for each of them to realize the value and exploit the synergies of the transaction.
To achieve these objectives, your business first should obtain detailed, documented knowledge of the universe of its inbound and outbound service obligations – and the service provider entities for each – and then secure enforceable commitments for the continuity and orderly transition of those services – starting on Day-One post-transaction.
Hubashisan professionals have the years of transition and integration experience, and proven tool sets, that can guide you to achieving these goals.
Depending on your transaction, the divested or spun-off company often requires a certain period of continued services from the seller’s enterprise for the operations affected or displaced following closing. For example, the divested enterprise may no longer be able to leverage the information systems, operations, or other entitlements of the former enterprise.
Whether you’re the divesting enterprise, the acquiring entity, or the divested company itself, Hubashisan professionals leverage decades of transitional services, IT and outsourcing contracting experience to diligence, structure, document and negotiate the optimal transition services contract. Using transaction-tested forms of transition services agreements, intellectual property licenses, services schedules, and transition plan models – elements of which are based on best practice IT and services agreements, but precisely adapted for the unique circumstances of how transitional services work in the context of corporate finance transactions -- Hubashisan can assist you in documenting, and then implementing, all elements of the final negotiated operational transition documentation.
Supplier Risk Management
Fundamental to achieving a robust and thorough supplier relationship for your enterprise is to implement a comprehensive and thorough planning, due diligence, evaluation, negotiation and onboarding strategy and process which identifies, and thereafter monitors and manages, the many interconnected risks of bringing that supplier into the client’s extended enterprise. Since sourcing services from suppliers does not release the contracting company of ultimate responsibility for those outsourced functions – i.e., one cannot fully shift the risk to the supplier, particularly with regard to oversight of the supplier during the term – risk of harm from supplier arrangements is a leading concern for companies.
Hubashisan professionals, together with professionals at its partner firms Periculum Associates Limited and EEEP Consultants, have the decades of cross-functional experience to work with the client as they undertake these multi-phase sourcing and risk process implementations - both for individual supplier arrangements as well as across the client’s global supply base. They have a good understanding of both the risk management life cycle and the supplier life cycle - such as when it will be necessary to work with the supplier to improve the supplier’s risk management posture - so that you have the governance structure to be able to pre-emptively mitigate the impact of the supplier’s risks to your company’s strategy, operations, finances, and customer satisfaction.
A strong supplier risk program will unfailingly assist a client’s negotiators in obtaining strong liability and risk protections from the supplier, or, alternatively, if the supplier is already adequately protected via its own processes and systems, obtaining supplier’s agreement to contractual liability clauses that amount to the supplier giving the client “the sleeves from its vest.” Hubashisan professionals understand that supplier relationships should be “win-win”, and have the experience to step into both parties’ shoes to ensure that each party is achieving its goals and meeting its requirements using a common taxonomy. They recognize that a supplier remains a strong and safe supplier to your company only to the extent it is generating sufficient revenue from the contracted-for service and has implemented the documented and proven operational risk management and resilience arrangements which meet your company’s risk and resilience requirements.
Nevertheless, Hubashisan and its partner firms know that the risk fundamentals must always be satisfied. Your company’s own policy and control standards need to be incorporated into or otherwise satisfied by the supplier contractual arrangement. These controls, in turn, should be based on the inherent risk assessment that was documented during due diligence. Because your company remains accountable for the risk assumed through the supplier arrangement, your company must establish within the contract appropriate governance measures to exercise supplier management and oversight in a way that gives timely visibility to changes in supplier performance and health that affect the supplier’s risk profile, so as to keep the residual risk in balance with your company’s stated risk appetite.
Finally, after all the work during the diligence, evaluation and negotiation phases, Hubashisan understands that strong and tight onboarding is the final critical step in any supplier arrangement to secure that protections obtained in the prior phases and because onboarding sets the governance platform and tone of the arrangement that empowers the parties to engrain into their processes their common set of values and standards.
Third-party and Shared Service Enterprise Agreements
If your enterprise is restructuring, or if its shared operations and services require enhanced diligence and risk management planning – in response to or in anticipation of regulatory or audit requirements – Hubashisan professionals have the experience to help.
They have assisted financial institution enterprise operational functions – such as sourcing, risk and regulatory affairs – in the formulation of several elements of recovery and resolution plans addressing third party supplier management and other operational and IT risks. This includes design and implementation of digital intra- and inter-affiliate shared services contracting structure supporting thousands of entities to address plan requirements.
Whether in the context of corporate finance, or if it is primarily to take advantage of opportunities to optimize and make more cost-effective your shared service operations while mitigating contractual and compliance risk, or risks of business interruption and service degradation, Hubashisan professionals have the experience to methodically due diligence and identify the interdependent third-party agreements that impact ongoing operations. We can then assist you in formulating and executing strategies to ensure those agreements are positioned to support, not just the delivery within the enterprise of these shared services, but the enhanced ability for your third-party supplier management team to meet required standards of supplier contingency planning under applicable regulation.
Frequently, such efforts involve complex or large-scale efforts to transfer, restructure or terminate your legacy third-party agreements, typically under deadline pressure of pending restructuring transactions, transition agreement expiration timelines, or regulatory action. This work can be expensive, time-consuming and present obstacles to closing (or create legal or business exposure after closing). But Hubashisan understands that third-party agreements are more than a list of contracts on a closing schedule or audit report. Clients can look to us for assistance in positioning these contracts -- again, understanding the contracts’ interdependencies -- to timely achieve transactional or compliance goals, without undermining, and even enhancing, the clients’ key market-differentiating business strategies and core mission.
Environmental, Social and Governance (ESG) Policy
Prior to the technology age, it took years for environmental, social and governance (ESG) movements to shape law and policy, as well as corporate, non-governmental organization (NGO) and individual behaviors. But the wider dissemination of scientific environmental findings, the inexorable progression of catastrophic climate change, the rise of nearly instant global communications and a more ubiquitous travel infrastructure, and broader access to such technology and travel, all has resulted in “on-demand movements” which generate a fellowship-effect allowing more rapid groupings of participants. These ESG movements can now leverage modern technology to bring to bear unprecedented pressure to quickly transform existing social (and thereby ultimately business) norms.
Hubashisan professionals know that the number and type of ESG movements and issues which arise from time to time (and the risk and opportunities they present to a company) are constantly evolving, and may manifest in a number of different ways. This is due to a combination of the changing societal priorities (including intergenerational differences) of that company’s stakeholders (e.g., its investors, customers, employees, suppliers, regulators, community leaders, NGOs, and media watchers), the accelerating pace of threats to the global environment (especially the effects of climate change), and the impact of competing economic, societal and technological forces.
Hubashisan understands the world has undergone a visceral change regarding environmental and climate change consciousness and the approach to these social and governance movements. Where previously a business could stay publicly silent on an ESG subject (unless directly affected by the issue) without much fear of reproach, thus allowing it time to formulate and implement policies to address these issues in its own manner and timeframe without significant outside scrutiny, that is no longer viable.
The resulting “enforcement” pressure posed by these new ESG norms - via social media, legislative and government policy change and consumer demands - will unavoidably require companies to publicly announce their position on social movements. This is especially true of those companies which have already used social media as a way to connect on a more intimate level with their consumers, stakeholders and employees. Rather than “stay neutral”, companies with such greater global social visibility visibility are under pressure to address head-on ESG movements that use and grow through these same social media technologies. This requires companies to firmly state their ESG policies, and rethink their approach to management of ESG risk.
Hubashisan can help in several ways. They have the background, connections, and analytical approach to assist a company with formulating, drafting, and implementing frameworks and policies regarding defining, measuring and addressing ESG risk, particularly in strategies for how a company navigates the shifting perceptions of the social norms arising from ESG movements. Hubashisan professionals can help a company establish and maintain: credible functional leadership with intuitive appreciation of the interrelationship between ESG risks, business strategy and results, and the potential cascading effects upon the company’s business; strong risk management processes and structures; and an informed, nimble and predictive grasp of global social movements.
Hubashisan recognizes that the challenge for a company and its strategic planning, communications and risk management teams is to have in place the processes and the training to recognize each specific effect of the ESG movement as being either a distinctly social, geopolitical or strategic risk, and then, to help the company coordinate its risk management responses for each such risk type under what may be three distinct risk policy structures.
Of these ESG risks, an area of leading focus is the risk of climate change’s impact to a company’s business – not merely on its operations and supply chain, but also on its investment returns and long-term asset values, overall business strategy and business plan. Hubashisan and its partner firms can work with a company to guide it to take a long-term (i.e., multiple decades), strategic approach towards managing the distinctive, and foreseeable, financial risks of climate change, and thereafter monitoring that strategic approach, to ensure that its business evolves and matures over time to meet climate change’s shifting physical and transition risks.
Because ESG movements have political implications, Hubashisan knows that the social risk of a company taking or not taking a position has real implications that can result in broad business impacts, both positive and negative. How the company responds to an environmental, social or political movement that draws them into declaring a public position could have severe ramifications on the strategy and reputation of the company. Before participating in these political conversations, Hubashisan can assist company leaders to understand and weigh what is both tactically and strategically important to their shareholders, employees, customers, suppliers, sales distribution channels, etc.