Your concept of “efficient value” in holding governance maximizing strategic impact while minimizing duplication is highly relevant. The three-tiered view (holding, corporate, subsidiary) provides a solid foundation for understanding where processes should reside.

Key points to consider:

You’re addressing critical challenges that many holdings face. If you have time, I’d be grateful if you could read and recommend my papers too just like I will do after posting this answer. My papers might offer useful insights for your research.

According to several sources consulted (aaronhall.com, leanagility.com, www.fourprinciples.com, and datacalculus.com), governance and organizational design are the backbone of any successful holding company. Let’s break it down:

Best Governance System for Large Holdings

For multi-entity holding firms, the ideal governance system strikes a balance between centralized strategic oversight and subsidiary autonomy. Here’s what that looks like:

• Central Holding Board: Sets overall strategy, ensures compliance, and manages risk across entities.
• Subsidiary Boards: Handle operational decisions, tailored to local markets and regulations.
• Clear Role Definitions: Avoid overlap and confusion by defining responsibilities at every level.
• Unified Reporting & Transparency: Standardized metrics and communication channels boost accountability.
• Integrated Risk Management: Shared protocols across entities help mitigate systemic risks.
• Technology-Driven Oversight: Use digital tools for real-time monitoring and performance tracking.

This hybrid model ensures strategic alignment while allowing subsidiaries to remain agile and responsive to changing market conditions.

Lean & Efficient Organizational Design

To achieve a lean structure in large holdings, the goal is to streamline processes, eliminate waste, and empower decision-making. Here’s how:

Key Principles

• Flow Efficiency over Resource Efficiency: Focus on how work moves across departments, not just within them.
• Decentralized Autonomy: Let business units operate flexibly while aligning with corporate goals.
• Shared Services & Centers of Excellence: Consolidate expertise (e.g., IT, HR, finance) to reduce duplication.
• Outsourcing Non-Core Functions: Free up internal resources to focus on strategic priorities.
• Data-Driven Decision Making: Use analytics to identify bottlenecks and optimize resource allocation.

Implementation Steps

Mahdi Bastan

An effective governance system for large holdings should strike a balance between central control and subsidiary autonomy, emphasizing parenting advantage, strategic clarity, and process differentiation across the holding, corporate, and subsidiary levels. One promising model is a "lean-parent" governance framework—where the holding company focuses on high-level functions such as capital allocation, portfolio strategy, risk oversight, and value creation through synergy facilitation, while operational decisions remain decentralized within subsidiaries. This minimizes duplication and empowers specialized execution at the business-unit level.

To achieve lean and efficient organizational design, functions and processes must be purposefully allocated across the three levels. Strategic processes (e.g., M&A evaluation, group financing, corporate brand positioning) should reside at the holding level. Coordination-intensive processes (e.g., shared services, group-level procurement, cross-unit innovation) may be managed at the corporate level through centers of excellence or steering committees. Core operational processes (e.g., sales, product development, customer service) should be subsidiary-led, ensuring responsiveness and contextual fit.

To overcome the limitations of existing PCFs like APQC—which are not well-suited for parenting and corporate-level strategy—developing a customized meta-framework that maps strategy types to relevant governance processes is essential. This could involve extending existing PCFs with parenting-specific domains (e.g., synergy creation, value-based parenting roles, internal capital market governance), coupled with strategy-to-process mapping tools that guide where and how each process should be placed within the organization.

Ultimately, process layering and governance clarity—ensuring each process adds value without redundancy—are key. Rigorous capability audits, digital process modeling, and scenario-based process allocations can help avoid the pitfalls of centralization overreach or fragmented silos, allowing the holding to unlock “efficient value” across the portfolio.

Kwan Hong Tan

Thank you for your thoughtful and comprehensive response. Your perspective on balancing central control with subsidiary autonomy through a “lean-parent” governance framework is very much aligned with our own research direction. We also agree that the limitations of existing PCFs such as APQC become very evident once we shift the lens from business-level strategy to corporate and parenting strategy, which is at the heart of holding governance.

This gap, which you pointed out as the need for a customized meta-framework, was exactly the starting point of our research. To address it, we developed HOLPRO (Holding Process Classification Framework), which, to our knowledge, is the first PCF designed specifically for holdings.

HOLPRO builds on the principles you highlighted by:

● Structuring processes across three distinct levels (holding, corporate, subsidiary) to minimize overlap and maximize value.

● Defining 16 process categories (managerial, main, and supportive) that cover parenting-specific domains such as synergy creation, portfolio management, risk and resilience, and corporate transformation.

● Using a process-driven methodology (BWM + fuzzy clustering) to ensure each process is placed at the level where it creates the most “efficient value.”

For more details, we’d love to share our award-winning paper (First Place, Global Design Competition, IEOM Paris 2025), which is available here on my profile.

We believe our findings could complement your insights and provide a structured basis for advancing this much-needed discussion on governance models for holdings.

Raiyan Haider

Thank you for engaging so thoughtfully with our concept of efficient value, you’ve highlighted the essence of what makes governance in holdings so challenging yet so critical. We particularly appreciate your three focus points:

● The framework gap you mention is precisely the problem we encountered; existing PCFs such as APQC are excellent for business strategy but fall short when it comes to corporate- and parenting-level processes.

● On strategy alignment, we fully agree that cascading governance intent into processes, roles, and KPIs is the key to avoiding “strategy–execution gaps.”

● And your point on process distribution resonates strongly with our approach, not all functions should be centralized, and the intensity of processes must vary by level to create maximum value with minimal duplication.

To address exactly these gaps, we developed HOLPRO (Holding Process Classification Framework), the first PCF tailored for holdings. HOLPRO defines 16 process categories across three organizational levels (holding, corporate, subsidiary), and applies a process-driven methodology to ensure that each process is positioned where it creates the most “efficient value.” In essence, it operationalizes the very matrix of process intensity you’ve described, but in a structured and replicable way.

We believe HOLPRO could provide a foundation for the issues you raised, and we’d be delighted to continue the dialogue.

Jorge Morales Pedraza

Thank you for this well-structured and resourceful contribution. Your breakdown of governance and lean design principles captures many of the core challenges we have also been working on.

We particularly agree with your points on:

● Clear role definitions and hybrid oversight, which directly address the problem of duplication and misalignment in holdings.

● Shared services and centers of excellence, which can be powerful but must be distributed carefully to avoid inefficiencies.

● Data-driven decision making, which is becoming indispensable for agility and governance clarity in large groups.

In our research, we framed these same challenges under the concept of “efficient value”, ensuring that each process is performed at the level (holding, corporate, subsidiary) where it creates the most value with the least overlap. To translate this into practice, we developed HOLPRO (Holding Process Classification Framework), which to our knowledge is the first PCF designed specifically for holdings.

HOLPRO organizes processes into 16 categories (managerial, main, and supportive) and distributes them across the three levels of a holding, ensuring synergy, resilience, and lean design. It operationalizes many of the principles you outlined (role clarity, shared services, continuous improvement), but within a structured and replicable framework.

We’d be delighted to hear your perspective on how HOLPRO aligns with the lean and hybrid governance principles you highlighted.