Modern business groups have dozen or even hundred companies. These companies are legal entities despite they are controlled and coordinated by a holding company. Subsidiary Governance is the management system by which these companies are driven and monitored. This system also monitors the relationship, legitimacy and iteration with the holding and other stakeholders involved in this system. Its main objectives are (i) to assure the compliance of Board of Director and Executive Committee decisions with shareholder’s concernments, and (ii) the misalignment of interests between the shareholder and the Board/Committee mitigation. This study aims to identify the critical factors for reducing the agency conflict between holding companies and its subsidiaries. It was developed a qualitative research based on case study supported by ten executive interviews in order to analyze the assumptions formulated from the bibliographical review. These executives work for a large Brazilian group with national and international subsidiaries and the interviews were realized in Rio de Janeiro during November and December 2011. Thus, this research provides an insight into the system involving holding and subsidiaries and the: i) existence of sharing of roles between holding company and its subsidiaries; ii) alignment and legal compliance as additional principles in this relation; iii) role of sponsor, advisor and structuring of the holding Board/Committee in this process and the aligning made by people, processes and control mechanisms; iv) the General Meeting, Board of Directors, Executive Committee and Audit in this context; and vi) segregation of identity as a principle.