Wednesday, October 28, 2020

Real-Time GRC in the Boardroom

Without effective GRC discipline, the business will face significant risk for surviving, and opportunities which it creates cannot be properly transferred into multidimensional business value. 

Now with the uncertainty around almost all industry sectors, companies large or small are faced with volatile market situations, emerging digital technology trends, extreme competition, nonlinearity, and ambiguity, etc. Corporate GRC disciplines have a direct link to business and its processes, and foster guidance, values, and principles governing the company's commercial activities for adapting to the business new normal. 

The purpose of running a digital corporate board is to direct the organization in the right direction, enforcing GRC disciplines in an almost real-time manner and monitor its performance continuously.

Real time information delivery: Information is the lifeblood and one of the most invaluable assets in digital businesses today. The power of information is to deal with the mountain of information with both technology and human know-how, convert information into invaluable knowledge or real-time insight, empower the business with real-time insight from the boardroom to front desks across the organization in ways never possible before. Data quality is a very important aspect, the BoDs shouldn’t digest the information provided by the management only, they need to proactively search for quality information via varying sources, harnesses fact-based communication and ensures the corporate board’s effectiveness and maturity.

With overwhelming growth of information and continuous business disruptions, today’s digital organization simply just can’t stand still. Information potential directly impacts the business's potential of the organization. Therefore, just-in-time information management is crucial for running a real-time digital organization. The corporate board as a top governance body also plays a significant role in overseeing information management agenda, highlighting the strategic perspective of information management and improving its differentiated value across the company.

Real time decision-making: In the digital era with “VUCA” characteristics, timing is always important to leverage the right information for making effective decisions by the right people at the different layers of organizational hierarchy. Time is a critical factor in decision-making scenarios, as you can’t afford to defer critical decisions until such time that all facts and information are available. The Board's role, in large part, is to make good decisions that enhance the value creation for the organization in the long term. The real-time business insight can help corporate board leaders make effective decisions timely, and this is more imperative when uncertainty, velocity, complexity, and doubts are major hindrances to decision making.

Decision making is both science and art, it takes both data analytics and intuition in order to make effective decisions. Most decisions the corporate board makes are strategic, it is important to make sure that you are using the right inputs and a model that adequately fits the problem to carry out the analysis. In fact, properly done real-time analytics should drive decisions as it will give you information that you wouldn't have otherwise. Keep in mind though, analytics is important, but do not forget common sense.

Real-time GRC: Forward-looking BoDs leverage executive scoreboard to oversee performance and enforce real-time GRC intelligence. Organizations could miss the opportunity if they solely focus on quantifiable benefits or short-term business profit. Digital board leaders today should gain a balanced viewpoint about the risk and opportunities. Poor board governance causes organizational confusion, which wastes resources and hurts the ability to maximize the company's mission. The executive scorecard filled with real-time business insight enables board leaders to review key people, finance, operational deliverables periodically and practice GRC disciplines scientifically.

Also, sometimes governance "standards" can be taken too far and become their own bureaucracy. A well set up GRC system would have the corporate board involved in developing, setting and monitoring the companies' strategic plan, orchestrating the strategy across the enterprise even in the real time. A Balanced real-time Scorecard, correctly and fully implemented and used, is nothing more than a strategic decision support system, enables the BoDs to take their fiduciary responsibilities effectively.

Without effective GRC discipline, the business will face significant risk for surviving, and opportunities which it creates cannot be properly transferred into multidimensional business value. Corporate Boards need to deal with the poor governance and eliminate all the bureaucratic regulations that deal with the symptoms, not the root cause and enforce real-time GRC discipline. For the majority of the time, the corporate board agenda should be focused on the performance progress toward the goals, targets, or schedules, etc, of the value maximization planning and improve the overall business maturity.


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