The context for corporate governance includes a wide range of circumstances and capabilities which are subject to constant organizational variability.
In a high mature organization, governance must be viewed and assessed at the enterprise level, developing innovative governance practices and achieving governance holism. Business leaders should keep asking themselves and others: What is the "spirit" in today's governance body? And what are the perspectives for the future of governance?
Good governance must create good performance, especially for the long run business growth: As business leaders today can’t predict every turn or curve that the organization will face. There is a myriad of information, conflicts, and change inertia in the modern business environment. One of the important goals of GRC discipline is to improve the corporate decision-making effectiveness and consistency. Good corporate governance creates a good decision-making system and good controlling system, which can assure the corporations’ operation under the correct directions and behaviors correctly. However, governance is not just about controlling or compliance, it’s about achieving high performance. Using the traditional ways of working in the silos and through overly rigid processes simply won't have enough time to produce the input for the decision-makers. A holistic GRC approach with a set of innovative practices can harness data-based communication, enforce accountability, improve prioritization, and optimize resource usage, etc.
There’s a correlation between corporate governance and business performance. There is a consensus that governance not only should but must influence to manage the level of performance of all the members of the company. Thus, holistic GRC approaches enforce accountability at different levels of the organization. The company with open-minded leadership and culture of innovation can build a safe environment for achieving risk intelligence and governance maturity as accountability involves shared ownership, empathetic communication, risk-taking attitude, professional capability, and necessary resources to succeed. Corporate governance indicates a relationship with the board, shareholders, management and stakeholders. If all these parties would perform to the vision and mission of the organization, it would increase the performance significantly. By implementing effective GRC programs, corporations can deliver immediate benefits to the entire organization.
Integrate GRC to make complex things less complex and improve business maturity: The governance rules include, but not limited to improving the functioning and transparency of the company, its business strategy implementation, and management performance. The value proposition of good GRC and brand should be integrated within and across operations not siloed off in a box and improve the success rate of business innovation. The GRC can be evaluated not only from the financial perspective but also from the involvement and signs being displayed inside the organization, from innovation, people (employees, customers, partners, etc.), and multidimensional value perspectives. High mature GRC disciplines focus on reliable service/solution delivery, vertical accountability, horizontal communication & collaboration, cost optimization, availability of talents, scalability of operations, or culture cohesiveness, etc.
GRC (Governance, Risk, and Compliance) is not a single process, but a collection of processes and other governance mechanisms, such as roles. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation. You cannot automate all aspects of GRC, there are people and various CSFs in it. To innovate and implement holistic GRC, embed the GRC mechanism in the key business processes; think big and small, think agile, think incremental, and most of all, think about how GRC can be delegated and even automated when possible, but also develop the best and next practices to drive business change and business value the most, and adapt to the digital new normal. If your organizations are less regulated, you can leverage GRC to facilitate discussion of common risks and opportunity issues across the enterprise and avoid duplicating effort for risk remediation.
Champion of corporate culture, ethics, and responsibility: There are different views of business evolution. The most commonly useful view includes influencers, drivers, business models, and initiatives for change, etc. The greatest risk for organizations today will be a real business/reputation issue that is not being properly identified or managed. So a holistic GRC needs to move more and more to be the hub and harbinger of culture and values, specifies the rules and procedures for making decisions in corporate affairs, and enforces good policies to improve the functioning and transparency of the company. For every corporation which should work effectively and run innovatively, you need strong GRC disciplines that help executives and management perform a risk analysis, harness connectivity (communication, coordination, and control), raise visibility and awareness for many things that are captured at the different levels of the organization.
The fabric of "value system" and "credibility" differentiates an organization from others. Corporate GRC discipline can fulfill its purpose as a high-level corporate enabler by providing a structured view and communication bridge between shareholders/investors and top business leaders such as corporate directors. Culture and the legacy are that the organization writes about itself through the times of decisions, dynamics, and challenges. The cultural competency arises in the manifestation of the company culture both internally and in the final analysis in the market environment. Corporate culture will, therefore, have an impact on the type of services or products finally created. Extrinsic reflection of culture is your business brand. It’s important to instill GRC philosophy in organizational culture, embed GRC mechanisms in the key business processes, and enforce GRC practices at daily business activities. Focus on proactive planning and process optimization for collaboration, accountability, and integration.
There are varying degrees of understanding of the scope of corporate governance such as governance framework, principle, structure, process, mechanism, practice, and metrics, etc. The context for corporate governance includes a wide range of circumstances and capabilities which are subject to constant organizational variability. You do not implement GRC, you earn it through repeated practices, and you innovate it through the next practices. That is something very valuable. If organizations have true governance, the corporate strategy would be able to deal with the conflicting priorities and provide greater clarity. Holistic GRC (governance, risk management, and compliance) plays a more important role in running an effective organization, harnessing innovation and achieving a high level of organizational maturity.
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