Monday, August 16, 2021


Governance should orchestrate change, do it with trust and flexibility.

Corporate GRC discipline can fulfill its purpose as a high-level corporate enabler by providing a structured view and communication bridge between stakeholders. 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. 

Thus, governance must be viewed and assessed at the enterprise level to enhance management effectiveness and improve organizational maturity.

Governance is steering, it's neither linear nor single dimension: Re-imagining the future of business is exciting, but investigating the different paths for unlocking business performance and potential is challenging. Governance as a multi-disciplinary approach is an enabling vehicle that provides a platform for determining sound corporate attitude, behavior and structured decision-making for improving business maturity. The digital era upon us is about innovation, choice and people. Governance should be understood via multidimensional lenses such as innovation, people, and multidimensional value perspectives, and be enforced holistically. Businesses need to take a systematic approach and develop it into a more solid form.

In reality though, given many organizations don't view governance as a steering wheel with "decision-making optimization," their governance efforts usually devolve into time-consuming, costly, bureaucratic constructs. The problem with governance is that the people who enforce governance normally have a frame of reference based on their own perception and experiences. Technically, governance can begin with frameworks, policies and standards to be put in place, and shared. It is important to set rules for safeguarding the status quo, providing a common language, building proper standards, appropriate business and use cases, etc, and develop a framework to take governance practices cross-enterprise collaboratively.

Governance is needed to create highly effective processes and information-enabled enterprises: Processes and structures are important business success factors to underpin organizational capabilities and implement business strategy. There are situations - process and information governance that are genuinely needed, because different parts of the business are making shared use of a process or information. Equally, there are many aspects that can be adequately addressed through the normal delegation of controls approach of the managerial structure within an enterprise. Governance structure is independent of management structure, but governance process/mechanism can be embedded into business process seamlessly, and governance practice should be shared cross-enterprise collaboratively as well.

 Processes/controls need to be designed based on people and the culture within an organization at that time. Process is multidimensional. At the logic level, with a role-based process view, the answer is not about “Single Version of Truth” because nobody can agree on what the truth looks like, it's a matter of perspective from which angle of the process you are looking from. Governance is crucial to improve process maturity. As the broader the reach of the process, the more diffuse the truth becomes, and the more important it is to commit the time and energy required to reach a holistic view of the process in order to improve its effectiveness and efficiency.

Governance of the execution is needed to manage and mitigate risks and intervention to ensure that strategic objectives do not drift: For every corporation which should work and be effective and efficient, you need good governance. Having a good understanding of the business vision and mission will ensure that an appropriate risk and compliance structure is realized without being bureaucratic or misaligned with business objectives. That means you have a clear organization, roles & responsibilities in place, guidelines, table of authorities and clearly defined processes are in place. It is an important step in managing risks and defining adequate mitigation actions. To enhance governance discipline, the risk review should reveal whether the highest risks are operational risks that need mitigation urgently or a problem in governance, or whether compliance is such an issue that you need to implement a compliance system first.

Do people need to be forced to comply with governance, risk, and compliance activity or do they naturally consider it as part of their daily job? For an organization embarking on a business journey to achieve people-centricity, it might be good to start at the top, cultivating the governance fluency and risk intelligent culture. It is critical to look at leadership, culture, staff training, existing processes, and existing technology first, make improvements if necessary, then determine whether new governance approaches/methods/tools would be a good addition to the mix, to ensure effectiveness, efficiency and high performance of management practices for implementing business strategy smoothly.

Governance is to frame business management. The corporate governance rules and principles need to be followed to improve the functioning and transparency of the company, its business strategy, and management performance. It should orchestrate change, do it with trust and flexibility.


Post a Comment