Investment in governance critical right now
The age of coronavirus cannot be an excuse to sideline needed governance improvements, argue two professionals.
Given the slew of challenges that have confronted businesses and organisations in 2020, governance considerations might be in the firing line for deprioritisation, given that so many are striving to keep their heads above water.
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This, Ainslie Cunningham and Deb Anderson argued, would be short-sighted.
In conversation with Lawyers Weekly, the pair – who are co-founders and directors of corporate governance firm and incorporated legal practice 3YS Owls, said that “nothing could be further from the truth” than presuming governance can or should take a hit in such turbulent times.
“Now that the spotlight has been well and truly shone on governance following a slew of royal commissions, increased regulatory scrutiny and erosion of public trust it is an opportune time for investment not only in governance professionals but governance across the whole organisation,” they said.
“Governance is an emerging and ever-changing framework to ensure the demands and needs of all stakeholders are met and it is therefore vitally important that businesses invest in their governance to ensure that they continue to survive and thrive.
“Governance professionals need to be the driver behind governance change in an organisation, however it still needs to be the responsibility of the leadership team and board collectively to obtain a holistic view that will enable ‘whole of organisation’ governance.”
The COVID-19 pandemic is no different, Ms Cunningham and Ms Anderson continued, in how businesses and organisations should be planning for adverse events that result in market disruption, or a natural catastrophe, or circumstances such as the threat or a new market entrant, general crisis management.
“Companies that have a strong governance and risk management frameworks that include stress testing, scenario planning, business continuity planning, IT disaster recovery plans, cyber security and other robust reporting in place that is reviewed on a regular basis by management and the Board will be well placed to survive and thrive in a similar environment in the future,” they submitted.
If businesses and organisations are to get the best out of governance professionals at this critical juncture, they outlined, the following questions must be asked: “Is there a clear strategic plan that everyone understands? Do we have a board and/or leadership team with the right mix of skills to execute on that strategy? Has the strategy been operationalised with the right systems and frameworks in place to identify, manage and monitor risk and compliance? Do you have the right culture and people practices that drive the right behaviour and performance? And are you attracting, retaining and incentivising people to achieve the strategic goals and objectives?”
Governance must be tailored to each business’ unique circumstances, Ms Cunningham and Ms Anderson opined, “and the governance professionals within those businesses are best placed to identify the requirements and provide solutions and when required, seek external expert advice”.
“The governance profession is filled with quiet achievers who are responsible for ensuring appropriate frameworks are in place to support the successful execution of a business’s strategy,” they continued.
“It is an exciting time for governance professionals moving forward as the challenges that have arisen over the past few years will help businesses recognise the important contribution, value and benefit that robust governance frameworks and the individuals that are responsible for driving these initiatives bring to an organisation.”